When the Price Level Falls, What Happens to the Number

question 48

Multiple Choice

When the price level falls, what happens to the number of dollars needed to buy a representative basket of goods?

• A) It increases, so the value of money rises.
• B) It increases, so the value of money falls.
• C) It decreases, so the value of money rises.
• D) It decreases, so the value of money falls.

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Definitions:

Efficient

The quality of achieving maximum productivity with minimum wasted effort or expense.

Utility Functions

Mathematical representations that indicate the level of satisfaction or utility an individual receives from consuming different bundles of goods and services.

Clothing

Textile-based materials worn on the body, primarily used for protection, modesty, and decoration.

Food

Nutrient-rich substances consumed by organisms to provide energy and maintain life.