Last year the price level increased from 118 to 122.The increase in the price level leads to a decrease in
A)the buying power of money.
B)the real interest rate.
C)the money wage rate.
D)the price of domestic goods and services relative to foreign goods and services.
E)potential GDP.

Question

Quizplus · Accepted Answer

An increase in the price level means that each unit of currency can purchase fewer goods and services, so the buying power of money decreases.

Last Year the Price Level Increased from 118 to 122