Answer:
As the overall price level in an economy falls, it causes: c. the real value of money balances to fall. When the overall price level in an economy decreases, it means that the prices of goods and services are going down. This decrease in prices leads to a decrease in the real value of money balances. It is important to note that the other options provided in the question are not correct in this scenario. When the overall price level decreases, it does not cause imports to rise, nominal interest rates to rise, or aggregate demand to increase. The correct answer is c. the real value of money balances to fall.
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