Question

A cause of inflation is _____.

• A. increase in money supply
• B. increase in money supply and fall in production
• C. decrease in money supply and
• D. fall of production

Answer 1

Answer: (B)

increase in money supply and fall in production

In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. It is caused when increase in money supply and production falls.