money and banking, Macroeconomics

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Suppose the price level in year 2009 is 100 and $100 buys 100 notebooks that year. If the price level rises to 125 in year 2010, what is the new value or purchasing power of the dollar? If, instead, the price level falls to 50, what is the value or purchasing power of the dollar? What relationship do you find between the U.S. price level and the value or purchasing power of the dollar?


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