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Sagot :
Money may purchase fewer products and services as prices grow. Therefore, we refer to a decrease in its purchasing power. In contrast, as prices drop, more may be purchased with a given amount of money, which is known as an increase in purchasing power.
Why Does the Price Level Change?
A country's population has access to more money for purchases when the amount of money in circulation is increased (for instance, by printing new notes), which increases demand for products and services and raises prices.
In contrast, if there is less money available, fewer things may be purchased, and prices tend to drop. Once more, the price level tends to decrease and to rise in response to changes in the supply of products and services.
Therefore, there won't often be any change in the price level if the supply of money increases by 25% and the supply of products and services increases by the same 25%.
To know more about Price Level , refer:
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