Inflation

What happens to the value of a banana if it is rare?

• It becomes less valuable.

• It becomes more valuable.

• Its value remains the same.

• It becomes worthless.

What is demand-pull inflation primarily caused by?

• A decrease in consumer demand.

• An increase in the supply of goods.

• An increase in consumer demand with an unchanged supply.

• A decrease in the cost of production.

What is the main characteristic of monetary inflation?

• A decrease in the overall money supply.

• An increase in the purchasing power of currency.

• An increase in the amount of money in circulation without a corresponding increase in goods.

• A stable price level for goods and services.