Increases in the overall price level:
A) result in an increase people's dollar-denominated wealth.
B) mean that a given number of dollars can buy as much in terms of real goods and services as before.
C) tends to cause people to increase their consumption.
D) reduce people's real wealth.

Question

Quizplus · Accepted Answer

Increases in the overall price level reduce the purchasing power of people's wealth, leading to a decrease in real wealth. This is because a given amount of money can now buy fewer goods and services than before.

Increases in the Overall Price Level