Which of the Following Is an Example of the Real-Balances

Multiple Choice

Which of the following is an example of the real-balances effect?

A) Workers are better able to negotiate a wage increase when the price level increases.
B) Nominal interest rates will increase when the price level increases.
C) Consumption decreases because products are more expensive when the price level increases.
D) Consumption decreases when the price level increases,because future prices are expected to fall.
E) The real value of savings will decrease when the price level increases.