An inflation fallacy is
A)when prices are falling and the economy is growing.
B)that inflation directly lowers living standards.
C)people think that prices are rising much higher than they actually are.
D)prices always deflate in a recession.

Question

Quizplus · Accepted Answer

The inflation fallacy is the mistaken belief that inflation itself lowers living standards. In reality, inflation is often a symptom of broader economic issues and policies, such as excessive government spending or currency devaluation. While high inflation can certainly have negative effects on the economy and individuals, it is not inherently the cause of lower living standards.

An Inflation Fallacy Is