In this case, the statement "If prices change in a way that leaves the overall price level unchanged, then no one is made better or worse off" is false.
Here's an explanation to support this answer:
1. **Price Level Unchanged:** When prices change in a way that the overall price level remains the same, it means that while the prices of some goods or services might have increased, others have decreased proportionally, resulting in an overall balance.
2. **Distribution of Gains and Losses:** Even though the overall price level is unchanged, individuals or groups within the economy can still be affected differently based on their consumption patterns and income sources. For example, if the price of essential goods increases while luxury items decrease in price, low-income individuals might be worse off as they spend a larger portion of their income on necessities.
3. **Impact on Welfare:** Changes in relative prices can lead to shifts in welfare across different segments of the population. While some may benefit from price changes, others may face challenges due to the redistribution of resources and purchasing power.
Therefore, the statement that no one is made better or worse off when prices change in a way that maintains the overall price level unchanged is false. It's important to consider the distributional impacts and how changes in prices can affect individuals and groups differently within the economy.
