If you have $5,000 in wealth and the price level decreases by 20 percent, then
A) the $5,000 will buy fewer goods and services.
B) the $5,000 will buy more goods and services.
C) the real value of the $5,000 decreases.
D) the real value of the $5,000 remains constant.

Question

Quizplus · Accepted Answer

When the price level decreases by 20 percent, each dollar can buy more goods and services than before, meaning the purchasing power of the $5,000 increases.

If You Have $5,000 in Wealth and the Price Level