What is the primary reason for inflation?

Show Answers

A rise in the amount of money circulating in the economyA decline in the overall production outputBoth an increase in money supply and a decrease in productionA reduction in money supply combined with lower production

Explanation

Option A is correct because inflation typically occurs when there is an increase in the money supply. While changes in production can affect prices, the main driver of inflation is the expansion of money circulating in the economy.