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Question

During periods of inflation, rates should_______.


A

Fluctuate

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B

Increase

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C

Decreases

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D

Remains Constant

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Solution

The correct option is B

Increase


The correct option is :B

The explanation for the correct option:

  1. Inflation is a rise in the price of commodities.
  2. It is a decrease in the currency's purchasing power.
  3. This situation lasts for a set time period.
  4. The inflation rate is the quantitative measure of price hikes in goods and services.
  5. Due to the influence of inflation more amount of money will be needed to buy commodities.
  6. It is expressed in percentages.

Final answer: During periods of inflation, rates should increase.


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