Suppose the country of Dingo experienced an economic trough in January 2011. We can conclude that Select one: O a. Dingo did not experience a recession in 2010. O b. an expansion occurred after January 2011. O c. Dingo's potential GDP fell in 2011. O d. real GDP in Dingo was increasing in January 2011.

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Q: Price Level AS P1 P2 AD AD'

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Q: None

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Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.