Which of the best describes the real balances effect

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Which of the following best describes the real balances effect? As the price level rises, the real value of dollar-denominated assets:

a. rises, which leads people to increase spending on normal goods and services

b. rises, which leads people to decrease spending on normal goods and services

c. falls, which leads people to increase spending on normal goods and services

d. falls, which leads people to decrease spending on normal goods and services

Reference no: EM13982148

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