2024 - JAMB Economics Past Questions and Answers - page 9

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.