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Suppose the price level and value of the U.S. Dollar in year 1 are 1 and $1, respectively. Instructions: Round your answers to 2 decimal places. a. If the price level rises to 1.50 in year 2, what is the new value of the dollar? b. If, instead, the price level falls to 0.40, what is the value of the dollar?

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User Arrie
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1 Answer

4 votes

Answer:

$0.80

Explanation:

If price level rises to 1.25 from 1 then:

Value of dollar = 1/1.25 = $0.80

answered
User Nolequen
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