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AP® Macroeconomics

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Purchasing Power

APMACR-EOYSVY

If Price level goes up from 1 to 1.3, what happens to the value of the dollar?

A

The purchasing power of the dollar stays constant.

B

The purchasing power of the dollar increases by about thirty percent.

C

Prices get lower by thirty percent.

D

The purchasing power of the dollar decreases by about twenty-three percent.

E

Inflation decreases.