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12 April, 15:21

If the price index rises from 100 to 120, the purchasing power value of the dollar:

A. may either rise or fall

B. will rise by one-sixth.

C. will fall by one-sixth.

D. will rise by 20 percent.

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Answers (1)
  1. 12 April, 15:32
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    Answer: C. will fall by one-sixth.

    Explanation:

    As the consumer price index rises the purchasing power declines. The only constant component which rises is the inflation.
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