When there is inflation,

Question

Quizplus · Accepted Answer

Although inflation causes the general level of prices to increase, some prices can still decrease. For example, during an inflationary period, the price of electronics may increase while the price of clothing may decrease. Additionally, the real incomes of income earners can be affected differently depending on various factors such as their job and the industries they work in. Inflation does not necessarily indicate that the economy is producing below full employment either, as the causes of inflation can be due to various factors such as changes in demand, supply, and government policies.

When There Is Inflation