If the average price level decreases,
what happens to the real output?
A. It remains the same.
B. It decreases.
C. It increases.
D. It has no impact from the price.

The intuition behind the real wealth effect is that when the price level decreases, it takes less money to buy goods and services. The money you have is now worth more and you feel wealthier. So, in response to a decrease in the price level, real GDP will increase.

Explanation:

claude wants to buy a car and there are a few factors that will affect the decision he makes in choosing what car he should buy. the first factor that can affect his decision regarding what car to buy can be the social and the cultural influence of the society he is living in. for example, there might be a certain car that might have a better value in the eyes of the society or in other words a better social norm regarding that car.

another factor can be personal habits. claude might need a spacious car because he might have kids or might utilize the back seat for other purposes hence a sports car (2 seated) won’t be appropriate.