The Wealth Effect refers to the idea that:

Question $1$ options:

$1)$

Investment increases as the wealth of the nation increases.

$2)$

A rise in the price level reduces the real value of money, decreasing consumption.

$3)$

Wealthier nations experience faster economic growth.

$4)$

The distribution of wealth affects government expenditure.

$5)$

An increase in wealth leads to an increase in the supply of money.