Question

Dashboard > My courses 19/WI BEC-151.99 Part :Introduction to Economics and Macroeconom Question 17 Not complete Points out of 3.00 P Flag question Inflation typically arises from: Select one o a. a sufficiently rapid contraction of the money supply b. a constant money supply c. a sufficiently rapid increase in the money supply. d. an increase in the price level. Check Type here to search SAMSUN F1 F3 F6 2 3 4 6

Answer 1

1. Inflation typically arises from an increase in the price level.

Ans is d) an increase in the price level.

Explanation:

when the price level increases then inflation occurs.

Other options are incorrect as:

Option a) when money supply fall it leads to deflation not inflation

option b) when money supply is constant inflation will not be effected by this.

option c) In case of recession ( or economic slowdown), the increase in money supply will not lead to inflation while it stable the economy.

Ans also if the sufficient rise in money supply is with accordance with increase in supply of goods and services, it will not lead to inflation. So this option is also incorrect.

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