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Romashka [77]
3 years ago
6

Assume the value of a country's currency is 1 when the price level is 1.2 If the price level changes to 1.4, by how much in perc

entage terms will the value of the country's currency change?
Business
1 answer:
Lostsunrise [7]3 years ago
7 0

Answer: -14.3%

Explanation:

The Value of money can be calculated by the formula;

Value of money = Amount of money / Price Level

Orginally the value of money was 1, the amount was 1.2 and so was the price level.

Price level has changed so the new value is;

= 1.2/1.4

= $0.857

The change therefore is;

=( 0.857 - 1) / 1

= -14.3%

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Explanation:

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