For each of the following scenarios, determine whether the situation described can be attributed to the real-balances effect, the interest-rate effect, or the foreign purchases effect. a. A higher price level increases the cost of borrowing, which causes people to buy fewer cars. multiple choice 1 Interest-rate effect Foreign purchases effect Real-balances effect b. A lower price level causes restaurants to become busier as more people purchase restaurant meals. multiple choice 2 Foreign purchases effect Real-balances effect Interest-rate effect c. When the U. S. price level rises, Canadian consumers are more likely to buy cars made in Mexico than cars made in the United States. multiple choice 3 Real-balances effect Foreign purchases effect Interest-rate effect