When the Consumer Price Index decreases from 105 to 100 a. more money is needed to buy the same amount of goods, so the value of money rises. b. less money is needed to buy the same amount of goods, so the value of money falls. c. more money is needed to buy the same amount of goods, so the value of money falls. d. less money is needed to buy the same amount of goods, so the value of money rises.
When the Consumer Price Index decreases from 105 to 100 a. more money is needed to buy the same amount of goods, so the value of money rises. b. less money is needed to buy the same amount of goods, so the value of money falls. c. more money is needed to buy the same amount of goods, so the value of money falls. d. less money is needed to buy the same amount of goods, so the value of money rises.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 6SCQ: The Consumer Price Index is subject to the substitution bias and me quality/new goods bias. Are the...
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Question
When the Consumer Price Index decreases from 105 to 100
a. more money is needed to buy the same amount of goods, so the value of money rises.
b. less money is needed to buy the same amount of goods, so the value of money falls.
c. more money is needed to buy the same amount of goods, so the value of money falls.
d. less money is needed to buy the same amount of goods, so the value of money rises.
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