If P is the price of goods and services measured in terms of money, then:
A) P measures the value of money measured in terms of goods and services
B) 1/P measures the number of dollars needed to buy a basket of goods and services
C) 1/P measures the quantity of goods and services that can be bought with $1
D) All of the above

Question

Quizplus · Accepted Answer

1/P represents the quantity of goods and services that can be purchased with one dollar, as it is the reciprocal of the price level P.

If P Is the Price of Goods and Services Measured