When median home prices rise- the value of real wealth __________ and.docx

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When median home prices rise, the value of real wealth decreases and aggregate demand decreases. Higher home prices reduce purchasing power and demand in the economy. While real wealth increases for current homeowners, the overall impact on wealth and demand is negative.

When median home prices rise, the value of real wealth __________ and aggregate demand
__________.
decreases; decreases
is unaffected; is unaffected
increases; is unaffected
increases; increases
increases; decreases
a. decreases; decreases
b. is unaffected; is unaffected
c. increases; is unaffected
d. increases; increases
e. increases; decreases
Solution
The answer is :
a-decreases, decreases;
because, the purchasing power decreases and the demand decreases.

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