Inflation:
A) hurts all groups in society equally.
B) occurs only if every price in an economy increases.
C) increases the scarcity problem by reducing the purchasing power of money.
D) if severe, tends to unify society as people seek solutions to a common problem.

Question

Quizplus · Accepted Answer

Inflation reduces the purchasing power of money, which exacerbates the scarcity problem by making it more difficult for people to afford goods and services.