Which of the Following Is True of a Price Level

question 51

Multiple Choice

Which of the following is true of a price level increase in an economy?

• A)When the price level increases,the purchasing power of money increases.
• B)When the price level increases,the purchasing power of money decreases.
• C)When the price level increases,the purchasing power of money remains unchanged.
• D)When the price level increases,the purchasing power of money either increases or decreases,depending upon the size of the national debt.
• E)When the price level increases,the purchasing power of money either increases or decreases,depending upon the level of government expenditures.

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Definitions:

Nominal Rate

The interest rate before adjustments for inflation, reflecting the rate of interest that a borrower pays a lender.

Annual Return

The percentage change in investment value from one year to the next, including any dividends or interest, indicating the investment’s gain or loss.

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash or additional stock.

Dual-Class Shares

A corporate structure with two or more classes of stock, each with differing voting rights, dividends, or other attributes.