If you are have $1,000 of money in the bank and the price level rises 5 percent, your
A) money is worth less in terms of what it can purchase.
B) purchasing power has risen.
C) money is worth more in terms of what it can purchase.
D) money is worth the same in terms of what it can purchase.

Question

Quizplus · Accepted Answer

As the price level rises, the value of currency decreases relative to the goods and services it can buy, therefore your money is worth less in terms of what it can purchase.

If You Are Have $1,000 of Money in the Bank