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Eduardwww [97]
3 years ago
7

If the average price level decreases,

Advanced Placement (AP)
1 answer:
Alex787 [66]3 years ago
7 0

Answer:

The intuition behind the real wealth effect is that when the price level decreases, it takes less money to buy goods and services. The money you have is now worth more and you feel wealthier. So, in response to a decrease in the price level, real GDP will increase.

Explanation:

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<h3>What is Money Supply?</h3>

This refers to the total amount of money that is in circulation in a country that usually increases spending.

Hence, an open market sale by the federal reserve will increase the interest rates because it would increase investment spending because an OMO sale decreases interest rates which make getting loans easier.

M= Money supply

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Read more about money supply here:

brainly.com/question/3625390

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