The value of a dollar varies
A)inversely with the price of gold.
B)inversely with the price level.
C)directly with the price level.
D)directly with the purchasing power of other major currencies.

Question

Quizplus · Accepted Answer

The value of a dollar is inversely related to the price level, meaning that as the price level increases, the value of the dollar decreases. This is due to inflation, which reduces the purchasing power of a dollar. The other options are not accurate: the value of a dollar is not directly related to the price of gold or the purchasing power of other currencies.

The Value of a Dollar Varies