Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one bi

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Suppose The Price Level Reflects The Number Of Dollars Needed To Buy A Basket Of Goods Containing One Cup Of Tea One Bi 1 (26.58 KiB) Viewed 61 times

Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket cost $10. In year two, the same basket cost $12. 1. The annual inflation rate in year 2 is percent. 2. In year one, $60 will buy baskets. 3. In year two, $60 will buy baskets. 4. Between year one and year two, the value of money has (increased or decreased).