If your money income stays the same but the price of one good that you are buying goes up, your effective purchasing power
A) rises.
B) does not change.
C) cannot be determined.
D) falls.

Question

Quizplus · Accepted Answer

If the price of a good that you are buying goes up, and your money income stays the same, then you will have less purchasing power. This means that you will be able to buy fewer of that particular good than you could before the price increase. Therefore, the effective purchasing power falls.

If Your Money Income Stays the Same but the Price