If the price index rises from 100 to 120, the value of the dollar:
A)may either rise or fall.
B)will rise by 16.67 percent.
C)will fall by 16.67 percent.
D)will rise by 20 percent.

Question

Quizplus · Accepted Answer

The value of the dollar is inversely proportional to the price index. Therefore, when the price index rises from 100 to 120, the value of the dollar falls by (120-100)/120 = 16.67 percent.

If the Price Index Rises from 100 to 120, the Value