As the price level decreases,what is the impact on real wealth and purchasing power?
A)Real wealth and purchasing power both increase.
B)Real wealth decreases and purchasing power increases.
C)Real wealth increases and purchasing power decreases.
D)Real wealth and purchasing power both decrease.

Question

Quizplus · Accepted Answer

When the price level decreases, each unit of currency can now purchase more goods and services. Therefore, consumers' purchasing power increases. Similarly, assets such as real estate or investments increase in real value as the general price level falls, leading to an increase in real wealth.

As the Price Level Decreases,what Is the Impact on Real