Asked by Ronald Blair on Jul 30, 2024
Verified
When the price level rises, the number of dollars needed to buy a representative basket of goods
A) increases, so the value of money rises.
B) decreases, so the value of money rises.
C) increases, and so the value of money falls.
D) decreases, so the value of money falls.
Price Level
An overall mean of the current prices for goods and services in the economic territory.
Value of Money
The purchasing power of money, which reflects the amount of goods or services that one unit of money can buy.
Dollars
The currency unit used in the United States, representing a standard measure of value.
- Gain insight into the bond between the quantity of currency, its worth, and price indices.
Verified Answer
YZ
yamna zafarJul 30, 2024
Final Answer :
C
Explanation :
When the price level rises, it means that more dollars are needed to purchase the same basket of goods, indicating that each dollar has less purchasing power. Therefore, the value of money falls.
Learning Objectives
- Gain insight into the bond between the quantity of currency, its worth, and price indices.