If inflation occurs and the Dow Jones industrial average is unchanged,that implies
A) security prices rose
B) security prices fell
C) investors' purchasing power diminished
D) investors' purchasing power increased

Question

Quizplus · Accepted Answer

If inflation occurs, the value of money decreases, leading to a decrease in investors' purchasing power. If the Dow Jones industrial average is unchanged, it implies that the security prices did not rise enough to compensate for the decrease in investors' purchasing power. Therefore, investors' purchasing power would be diminished.

If Inflation Occurs and the Dow Jones Industrial Average Is