What happens during inflation?
Responses
Prices fall and people start spending again.
Prices fall and people start spending again.
The value of a dollar does not change.
The value of a dollar does not change.
There's more money in circulation and the prices rise.
There's more money in circulation and the prices rise.
People have less income.
People have less income.
1 answer
During inflation, there is more money in circulation, which leads to a general increase in prices. As a result, the value of a dollar decreases, and people may have less income in real terms. Inflation does not typically cause prices to fall; instead, it causes prices to rise.
1 answer