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price level to Suppose the central bank in the nation of Zook attempts to pay off its national debt by printing large amounts of currency. The large increase in the money supply causes the price level to rise by 800 percent. What do you expect will happen to the value of Zook's currency?

Respuesta :

Answer:

87.50%

Explanation:

The calculation of value of Zook's currency will decrease in percentage is shown below:-

For computing the Percentage decrease first we need to find out the value of money which is shown below:-

Value of money = 1 ÷ Price level

= 1 ÷ 8.00

= 0.125

Percentage decrease = (Value of money - 1) ÷ 1 × 100%

= (0.125 - 1) ÷ 1 × 100%

= -0.875 ÷ 1 × 100%

= 87.50%