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Consider a nation in which the volume of goods and services is growing by 5 percent per year.
If a country's economic size is growing faster than the rest of the world, then
A. other countries will also have similar growth.
B. This country will gain influence in the international sector.
C. The balance of trade will worsen.
D. The share of the world's goods and services that are produced in this country will fall.
The Pigou effect: A) suggests that as prices fall and real money balances rise, consumers should feel less wealthy and spend less. B) suggests that as prices fall and real mo
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