Your grandmother tells you a dollar doesn’t go as far as it used to. she says the “purchasing power” of a dollar is much less than it used to be. explain what she means. try to use and explain terms like inflation and deflation in your answer.

What she means is that a dollar does not buy the same amount of things as it used to. Take a .05 cent candy as an example, in year one the candy costs 5 cents which means you can buy 20 candies. In year 2 the price is .08 cents and you can buy 1/.08 = 12.5 or simply 12 candies. Assuming the candy hasn't increased in quality, this is known as inflation.

The answer should be b.