According to the Real-Balance Effect, an Increase in the Price

Multiple Choice

According to the real-balance effect, an increase in the price level will

A) leave the total quantity of goods and services purchased unchanged since the price level of all goods has increased.
B) decrease the total quantity of goods and services purchased because of an increase in interest rates.
C) lead to a corresponding increase in the purchase of goods and services since businesses are now earning more money.
D) decrease the quantity of goods and services as a result of a decrease in the real value of money balances.