QuestionWhat does inflation do to prices? A. Decrease B. Double C. Increase D. Stay the same
Studdy Solution
STEP 1
Assumptions1. Inflation is generally defined as a sustained increase in the general level of prices for goods and services. . The options provided are A. Prices decrease, B. Prices double, C. Prices increase, D. Prices stay the same.
STEP 2
By definition, inflation is the rate at which the general level of prices for goods and services is rising. Therefore, during periods of inflation, the prices of goods and services increase.
STEP 3
Based on the definition of inflation, we can match the effect of inflation with the options provided. The correct answer is C. Prices increase.
So, the effect of inflation on the prices of goods and services is that prices increase.
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