22 Statistics Canada has recently reported historically high increases in the CPI. As Tiff Macklin, the governor of the Bank of Canada, noted, higher inflation in Canada will help some Canadians, but it will certainly hurt others. We know some factors shift the AD and some factors AS. The real- balances effect suggests that a: 00:23:39 Multiple Choice lower price level will decrease the real value of many financial assets and therefore cause an increase in spending. lower price level will increase the real value of many financial assets and therefore cause an increase in spending. higher price level will increase the real value of many financial assets and therefore cause an increase in spending. inflation and unemployment are related. lower price level will decrease the demand for money, decrease interest rates, and increase consumption and investment spending.