Relative prices cannot fall when absolute prices are rising.

Question

Quizplus · Accepted Answer

Relative prices can still fall even if absolute prices are rising, as long as the rate of increase in one price is slower than the rate of increase in the other. For example, if the absolute price of apples rises by 10% and the absolute price of oranges rises by 15%, the relative price of apples compared to oranges will still fall, even though both absolute prices are increasing.

Relative Prices Cannot Fall When Absolute Prices Are Rising