Inflation
A) means demand is falling and supply is rising.
B) increases the value of the money supply.
C) rarely affects the distribution of income or wealth.
D) is generally highest when there is plenty of excess capacity and unemployed resources.
E) is a general upward movement in the average level of prices.

Question

Quizplus · Accepted Answer

Inflation is a general upward movement in the average level of prices, meaning that overall prices for goods and services are increasing. This can be caused by a number of factors, such as an increase in demand or a decrease in supply. Inflation can have a significant impact on economies and individuals, such as reducing the purchasing power of money and leading to higher interest rates.