Formula for the relationship between the purchasing power of the U.S. dollar and the price level. The purchasing power of the U.S. dollar is ( directly, inversely ) related to the price level: when the consumer price index (CPI) goes up, the value of the dollar goes (down, up ). Higher prices ( increase, decrease) the dollar’s purchasing power because people need (fewer, more ) dollars to obtain specific quantity of goods and services. Value of the dollar ($V) =

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