If the Price Level Increases

question 260

Multiple Choice

If the price level increases

• A) the buying power of your bank saving account falls.
• B) the buying power of your bank saving accounts rises.
• C) there is no effect on buying power.
• D) the economy tends to grow faster.

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Definitions:

Options Contracts

Options contracts are agreements between two parties to buy or sell an asset at a predetermined price on or before a specific date.

Speculator

An individual or entity that engages in the buying and selling of financial instruments or assets for short-term profit, taking on higher risk.

Futures Contract

A financial contract obligating the buyer to purchase, and the seller to sell, a particular asset at a predetermined future date and price.

Hedger

An individual or entity that enters into a financial contract to mitigate the risk of adverse price movements in an asset.