In a capitalist economy the lenders are usually _____ and the borrowers are usually ______.
financial intermediaries, firms
financial intermediaries, households
households, the rest of the world
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Which of the following is not an effect of an increasing price level (inflation)?
A decrease in the aggregate quantity of goods and services demanded
Increasing demand for the products of foreign countries
A decrease in the real value of household cash holdings
An increase in interest rates
An increase in aggregate supply
A decrease in the aggregate quantity of good and services demanded
When price level (inflation) in the United States rises:
the interest rate falls, and people want to borrow more money.
producers demand more new machinery, contributing to an increase in aggregate demand.
Americans tend to demand more foreign goods and services.
the French, Canadians, Japanese, and citizens of other nations find our exports more attractive.
to replenish the value of your real wealth, you would save less and consume more.