When the price level falls by 50 percent, products that previously cost $600 now cost $300.

Name: When the price level falls by 50 percent, products that previously cost $600 now cost $300.
Brand: Quizplus
Rating: 4.9 (40 reviews)

Question

Quizplus · Accepted Answer

This is correct according to the formula for calculating changes in price level: 
%Δ P = (P₂ - P₁) / P₁ x 100%
%Δ P = (300 - 600) / 600 x 100%
%Δ P = -50%
Therefore, when the price level falls by 50 percent, products that previously cost $600 now cost $300.

When the Price Level Falls by 50 Percent, Products That