1.) A 15 percent increase in the price level: A)Increases the value of a dollar

Question

1.) A 15 percent increase in the price level: A)Increases the value of a dollar by 15 percent B)Decreases the value of a dollar by 15 percent C)Decreases the value of a dollar by 13 percent D)Decreases the value of a dollar by 8 percent 2.) If the value of the dollar is falling, then it follows that: A)The price index is falling B)The price index is rising C)Nominal incomes are falling D)Interest rates are rising 3.) The purchasing power of the dollar would fall by 20% if the price index rises by: A)10 percent B)12.5 percent C)25 percent D)44 percent

Explanation / Answer

1.) A 15 percent increase in the price level:
A)Increases the value of a dollar by 15 percent
B)Decreases the value of a dollar by 15 percent
C)Decreases the value of a dollar by 13 percent
D)Decreases the value of a dollar by 8 percent

2.) If the value of the dollar is falling, then it follows that:
A)The price index is falling
B)The price index is rising
C)Nominal incomes are falling
D)Interest rates are rising
3.) The purchasing power of the dollar would fall by 20% if the price index rises by:

A)10 percent
B)12.5 percent
C)25 percent
D)44 percent

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