When Prices Rise in the United States, What Is the Effect

Multiple Choice

When prices rise in the United States, what is the effect on consumption and aggregate expenditure?

A) Real interest rates rise, and this decreases consumption and aggregate expenditures.
B) The real value of wealth decreases, leading to a decrease in consumption and a decrease in aggregate expenditure.
C) The real value of wealth increases, leading to an increase in consumption and an increase in aggregate expenditure.
D) The real value of debt increases, and this increases consumption and aggregate expenditure.