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 regarded as the "overall price level."
C)an increase in the value of money is associated with a decrease in P.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A) 1/P is the reciprocal of P, so an increase in 1/P represents an increase in the value of money measured in terms of goods and services.
B) P is a measure of the average level of prices for goods and services in an economy, so it can be regarded as the "overall price level."
C) An increase in the value of money means that each unit of money can buy more goods and services, so there is a corresponding decrease in P.

If P Denotes the Price of Goods and Services Measured