Question on: JAMB Economics - 2024
If two bags of rice were sold for #1,250 a month ago and two weeks later, the same amount was used to procure one bag, this simply means that the value of money is
A
constant
B
fluctuating
C
increasing
D
decreasing
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Correct Option: D
The scenario describes a situation where the purchasing power of money has decreased. Initially, #1,250 could buy two bags of rice. Later, the same amount of money could only buy one bag. This means that the prices of goods (in this case, rice) have increased relative to the value of money.
- Decreasing Value of Money: The ability of money to purchase goods has fallen. This is the definition of a decrease in the value of money.
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