Question

If prices in the economy​ rise, then A. the purchasing power of a dollar rises. B. the purchasing power of a dollar cannot be determined. C. the purchasing power of a dollar stays constant. D. the purchasing power of a dollar declines.

Answer 1

D. the purchasing power of a dollar declines.

Step-by-step explanation:

If prices in the economy rises, then the purchasing power of a dollar declines. That is, the quantity of things a dollar can buy reduces compared to before the increase in prices. This is also termed inflation, that is, a decline in the purchasing power of the dollar.