Your total wealth is $1,000, which you are holding in your savings account. If the price level rises by 10 percent, your wealth
A)increases by an unknown amount.
B)is unchanged.
C)decreases to $990.
D)is worth 10 percent less than before the price level change.
E)increases to $1,100.

Question

Quizplus · Accepted Answer

When the price level rises by 10 percent, the purchasing power of your wealth decreases by 10 percent, meaning your $1,000 is worth 10 percent less in terms of what it can buy.

Your Total Wealth Is $1,000, Which You Are Holding in Your