If prices in the economy rise, then A. the purchasing power of a dollar rises. B. the purchasing power of a dollar cannot be determined. C. the purchasing power of a dollar stays constant. D. the purchasing power of a dollar declines.

Question

Addison Wyatt

Social Studies

22 April, 01:04

If prices in the economy rise, then A. the purchasing power of a dollar rises. B. the purchasing power of a dollar cannot be determined. C. the purchasing power of a dollar stays constant. D. the purchasing power of a dollar declines.

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Answers (1)

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Chris Haynes · Answer 1

D. the purchasing power of a dollar declines.

Explanation:

If prices in the economy rises, then the purchasing power of a dollar declines. That is, the quantity of things a dollar can buy reduces compared to before the increase in prices. This is also termed inflation, that is, a decline in the purchasing power of the dollar.