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Quiz: Quiz - chapter. 24 Time Remaining: 00:47:40 Submit Quiz This Question: 1 pt 7 of 20 (0 complete) ▼ This Quiz: 20 pts possible Which of the following best describes the wealth effect? O A. When the price level falls, the real value of household wealth falls. O B. When the price level falls, the nominal value of household wealth falls. O C. When the price level falls, the real value of household wealth rises. D. When the price level falls, the nominal value of household wealth rises Click to select your answer

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When the price level falls in the economy, the nominal value of portfolio or the investments fall. Thus the wealth of the investors falls. Therefore the correct option should be B.

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