The following table is for a particular country in which C is consumption expenditures,I g is gross investment expenditures,G is government expenditures,X is exports,and M is imports.All figures are in billions of dollars.Each question is independent of the other questions.

-Refer to the above table.The wealth or real balances effect of changes in the price level is:
A) shown by columns (1)and (2)of the table.
B) shown by columns (1)and (5)of the table.
C) shown by columns (1)and (4)of the table.
D) not shown by the data in the table.

Question

The following table is for a particular country in which C is consumption expenditures,I g is gross investment expenditures,G is government expenditures,X is exports,and M is imports.All figures are in billions of dollars.Each question is independent of the other questions.
 
-Refer to the above table.The wealth or real balances effect of changes in the price level is:
A) shown by columns (1)and (2)of the table. 
B) shown by columns (1)and (5)of the table. 
C) shown by columns (1)and (4)of the table. 
D) not shown by the data in the table.

Quizplus · Accepted Answer

The wealth or real balances effect of changes in the price level is shown by columns (1) and (2) of the table. This is because column (1) shows the initial price level, and column (2) shows the new price level. The difference between these two columns shows the change in the price level. Column (2) also shows the new quantity of money demanded, which is affected by the change in the price level.

The Following Table Is for a Particular Country in Which