If P denotes the price of goods and services measured in terms of money,then
A)1/P represents the value of money measured in terms of goods and services.
B)P can be interpreted as the inflation rate.
C)the supply of money influences the value of P,but the demand for money does not.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Option A is correct as the reciprocal of P represents the purchasing power of money, i.e., the value of money measured in terms of goods and services. Option B is incorrect as P itself denotes the price level and not the inflation rate. Option C is also incorrect as the demand for money influences its value and purchasing power.

If P Denotes the Price of Goods and Services Measured