Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 27

Suppose the price level and value of the dollar in year 1 are 1.0 and $1.00, respectively. If the price level rises to 1.25 in year 2, what is the new value of the dollar If instead the price level had fallen to.50, what would have been the value of the dollar What generalization can you draw from your answer