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A general rise in the price level means the purchasing power of money has
Adeteriorated
Bimproved
Cstayed constant
Dbeen fixed by law
Answer & Solution
Correct answer: A. deteriorated
1. Money's value is what a unit of it can buy.
2. If all prices rise, one rupee buys less of every commodity.
3. The purchasing power of money has therefore **deteriorated**.
4. This is why a stable price level matters for money to work as a store of value.
_Source: NCERT Class 12 Introductory Macroeconomics, Ch 3 "Money and Banking", section 3.1 FUNCTIONS OF MONEY_
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