An individual holds $10 000 in a non-interest-earning checking account,and the overall price level rises significantly.Other things constant,we would expect
A)the individual's real wealth to decrease and consumption to diminish.
B)the individual's stock of real wealth to decrease but real national income to increase.
C)no change in the individual's real wealth but a decline in real national product.
D)the individual's wealth to increase.

Question

Quizplus · Accepted Answer

If the overall price level rises significantly, the purchasing power of the individual's money decreases. This means that the individual's real wealth decreases because they can buy fewer goods and services with their money. As a result, consumption may also diminish as the individual may not be able to afford as much as they could before.

An Individual Holds $10 000 in a Non-Interest-Earning Checking Account,and