Which of the following is true of the value of money? It
- is positively related to the price level
- depends on the value people attach to it
- is determined by the government
-
is inversely related to the price level
The correct answer is: D
Explanation
Value of money is what one unit of money can buy and the price level is the average of prices of all the goods and services within an economy. So when the price level increases the value of money goes down and vise versa. Hence the relationship between price level in an economy and the value of money is inverse.