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)real incomes are falling.
D)interest rates are rising.

Question

Quizplus · Accepted Answer

When the value of the dollar falls, it means that it is worth less in comparison to other currencies. This typically leads to an increase in the price of imports, which can ripple through the economy and lead to a general increase in the price index (i.e. inflation).

If the Value of the Dollar Is Falling, Then It