1. the level of prices and the value of money suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. in year one, the basket costs $9.00. in year two, the price of the same basket is $8.00. from year one to year two, there isdeflation at an annual rate of . in year one, $72.00 will buy baskets, and in year two, $72.00 will buy baskets. this example illustrates that, as the price level falls, the value of money .

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan