If the price of gasoline increased 100 percent during a period of time when inflation was 100 percent, then the real price of gasoline would

Question

Quizplus · Accepted Answer

The real price of gasoline would remain constant because although the nominal price increased by 100 percent, this increase would be offset by the 100 percent inflation during the same period of time. Therefore, the purchasing power of consumers in relation to gasoline would remain the same, resulting in a constant real price.

If the Price of Gasoline Increased 100 Percent During a Period