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Business, 16.03.2020 20:07 lalacada1

Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of chips, and one comic book. In year one, the basket costs $10.00.
In year two, the price of the same basket is $9.00. From year one to year two, there is (deflation or inflation) at an annual rate of .
In year one, $50.00 will buy baskets, and in year two, $50.00 will buy baskets.
This example illustrates that, as the price level falls, the value of money (rises, falls or remains the same) .

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