A sudden decrease in the U.S. price level
A) makes those with dollar debts worse off.
B) makes those with dollar debts better off.
C) does not affect those with dollar debts.
D) makes those with DM worse off.
E) makes creditors worse off.

Question

Quizplus · Accepted Answer

A sudden decrease in the U.S. price level will increase the purchasing power of the dollar, which means that those with dollar debts will need to pay back more valuable dollars. This results in a worse-off situation for them.

A Sudden Decrease in the U.S. Price Level