The value of money falls as the price level
A)rises,because the number of dollars needed to buy a representative basket of goods rises.
B)rises,because the number of dollars needed to buy a representative basket of goods falls.
C)falls,because the number of dollars needed to buy a representative basket of goods rises.
D)falls,because the number of dollars needed to buy a representative basket of goods falls.

Question

Quizplus · Accepted Answer

As the price level rises, more dollars are needed to purchase the same amount of goods, which means that each individual dollar is worth less. This leads to a decrease in the value of money.

The Value of Money Falls as the Price Level