The purchasing power of money increases when
A) the inflation rate increases.
B) there is inflation.
C) there is deflation.
D) there are more dollars in the economy.

Question

Quizplus · Accepted Answer

Deflation means the value of money is increasing, so the purchasing power of money increases. Inflation (choices A and B) decreases purchasing power, and more dollars in the economy (choice D) can lead to inflation and a decrease in purchasing power.

The Purchasing Power of Money Increases When