If You Have $1,000 in Wealth and the Price Level

question 283

Multiple Choice

If you have $1,000 in wealth and the price level increases by 20 percent, then

• A) the $1,000 will buy fewer goods and services.
• B) the $1,000 dollars will buy 20 percent more goods and services.
• C) the real value of the $1,000 increases.
• D) you will be able to buy fewer goods, but the real value of those goods will increase.

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Definitions:

Initial Investment

The initial amount of money put into a project, asset, or venture to start it or acquire it.

Capital

Assets or resources that are used to generate income or invested to create financial gains.

Proportion

A comparative relationship between parts of a whole, often expressed as a ratio or fraction.

Parking Permit

A document or card that authorizes a vehicle to be parked in a designated area or parking lot for a period.