CUET Preparation Today
If there is a general increase in the price level, the value of money in terms of any commodity must have ___________. |
Increased Decreased Remained constant Either decreased or increased |
Decreased |
The correct answer is Option 2: Decreased If there is a general increase in the price level, the value of money in terms of any commodity must have decreased. When the overall price level rises, it means that the prices of goods and services are increasing. As a result, each unit of money has less purchasing power and can buy fewer goods and services than it could before. Therefore, the value of money, in terms of what it can purchase, declines when the price level increases. |
