Business, 05.05.2020 17:38 mollymay125

For each of the following scenarios, determine whether the situation described can be attributed to the real-balances effect, the interest-rate effect, or the foreign-purchases effect.1. As a result of an increase in the price level, the cost of borrowing increases, which causes people to buy fewer cars. A. Foreign-purchases effectB. Interest-rate effectC. Real-balances effect
2. When the price level decreases, restaurants become busier as more people purchase restaurant meals. A. Foreign-purchases effectB. Real-balances effectC. Interest-rate effect

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