What does the term 'inflation' refer to?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

Show Answers

An increase in the budget shortfallAn expansion in the amount of money circulatingAn upward movement in the overall price levelA mirror image or likeness

Explanation

Option A refers to a higher budget deficit, which is not inflation. Option B indicates a rise in money supply, which can influence inflation but is not the definition itself. Option C correctly defines inflation as a general increase in prices across the economy. Option D is unrelated to the concept of inflation.

Practice related questions from the same subject.

1.Which of the following best describes deflation?
2.Under what condition can two nations benefit from engaging in international trade?
3.Which of the following represents a legitimate form of currency?
4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

What does the term 'inflation' refer to?

Explanation

More Basic of Economics MCQs