Explain how a rise in the price level affects aggregate quantity demanded with the:
Money wealth effect.
a) The wealth of foreigners falls, reducing how much they import, thus reducing domestic demand.
b) The interest rate paid on money falls, reducing the amount of money people hold, which then reduces spending.
c) People put more money in the bank because nominal interest rates have risen. This reduces spending.
d) The money people hold in cash is worth less, which decreases spending.
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