If the consumer price index rises, the
A) real income of households increases
B) value of the dollar increases
C) dollar will purchase additional goods and services
D) purchasing power of money declines

Question

Quizplus · Accepted Answer

When the consumer price index (CPI) rises, it indicates that the average level of prices for goods and services in an economy has increased. This means that each unit of currency buys fewer goods and services than before, leading to a decline in the purchasing power of money.

If the Consumer Price Index Rises, the