Answer:
price level fall and value of money is rises
Explanation:
given data
one year basket costs = $10.00
two year two basket costs = $9.00
one year buy baskets = $50
year two,buy baskets = $50
to find out
as the price level falls, the value of money will be
solution
we see that when we compare to 1 year price go down from $10 to $ 9
so deflation at annual rate is [tex]\frac{10-9}{10}[/tex] = 10%
so here
sum of $50 will be buy here = [tex]\frac{50}{10}[/tex] = $5 in one year
and $ 50 buy in 2 year is = [tex]\frac{50}{9}[/tex] = $5.56 in two year
so this is show here that price level fall and value of money is rises