Question

If the number of dollars needed to buy a representative basket of goods falls, the price level

Answer 1

Answer:

The correct answer is letter "C": decreases, so the value of money rises.

Explanation:

A basket of goods is mainly used to evaluate changes in urban consumer habits. Food, housing, healthcare, education, and recreation expenses are included in a basket of goods. It is usually studied with the Consumer Price Index (CPI) and is also a tool useful to find out the levels of inflation within a specific market.

In the case less number of dollars are needed to purchase a "regular" basket of goods, it implies the average price level has decreased, thus, the money value has increased.