Multiple Choice
Which of the following best illustrates the wealth effect?
A) Jacob saved $25,000, which he put in the stock market. The market suddenly did very well, and though Jacob is not yet aware of it, his stock portfolio value rose to $36,000.
B) Simon felt he needed at least $800,000 to retire comfortably. He increased his savings to build up his wealth.
C) The Jones family has $50,000 in a bank. Prices in the market rose dramatically, diminishing their purchasing power by $50,000.
D) Margaret had her savings in Treasury bonds. She thought that stocks might offer her a better opportunity to increase her wealth, so she sold her bonds to buy stocks.
Correct Answer:
Verified
Correct Answer:
Verified
Q53: The concept of the vertical long-run aggregate
Q58: An increase in net export spending will
Q137: If the marginal propensity to consume is
Q181: If the intersection of the short-run aggregate
Q182: When the price of a given product
Q183: The _ is positively sloped because some
Q186: The _ shows the amount of output
Q187: (Figure: Predicting Aggregate Demand Shifts) Which of
Q190: Which of the following would cause cost-push
Q257: If an economy is on the vertical