1.
When median home prices rise, the value of real wealth __________ and aggregate demand
__________.
decreases; decreases
is unaffected; is unaffected
increases; is unaffected
increases; increases
increases; decreases
a. decreases; decreases
b. is unaffected; is unaffected
c. increases; is unaffected
d. increases; increases
e. increases; decreases
Solution
The answer is :
a-decreases, decreases;
because, the purchasing power decreases and the demand decreases.