Why is there an inverse relationship between the purchasing power of the dollar and the price level?
Multiple choice question.
Because when the price level rises, less dollars are needed to buy a particular amount of goods, services, or resources
Because when the price level rises, more dollars are needed to buy a particular amount of goods, services, or resources
Because when the price level rises, the value of the dollar also rises
Because when the price level rises, the same amount of dollars are needed to buy a particular amount of goods, services, or resources
1 answer
The correct answer is:
Because when the price level rises, more dollars are needed to buy a particular amount of goods, services, or resources.
This reflects the inverse relationship between purchasing power and price level, as higher prices reduce the amount of goods and services one can purchase with a fixed amount of money.
