When does 'inflation' occur?
A)when the value of money is rising
B)when the value of real GDP decreases
C)when the value of real GDP increases
D)when the general price level is rising

Question

Quizplus · Accepted Answer

Inflation occurs when the general price level in an economy is rising. This means that the value of money is decreasing and it takes more money to buy the same goods and services. When the general price level is stable or decreasing, there is no inflation.

When Does 'Inflation' Occur