Question

Which of the following is a good example of inflation? OA. You get a flat tire on your car. O. You work three jobs in order to pay your bills. • C. It costs you $50 to gas up your car this month. But last month it cost you $85. D. it costs you 85 to gas up your car this month. But last month any cost. you $50.

Answer 1

The example illustrating inflation is option D, where it costs more to gas up a car this month compared to the previous month, indicating a decrease in the purchasing value of money.

Step-by-step explanation:

• The best example of inflation among the provided options is D. it costs you $85 to gas up your car this month. But last month it cost you $50. Inflation refers to the general increase in prices and fall in the purchasing value of money over time.
• If the price of gasoline has gone up from $50 to $85 without a change in the amount of gasoline purchased, this indicates that the value of money has decreased, as it now buys less gasoline than before, which is a classic sign of inflation.
• Inflation is like a balloon, involving a gradual increase in prices. This is evident in everyday conversations where people recall being able to buy more with less money in the past.
• Tracking inflation often involves comparing the prices of a fixed basket of goods over different periods. An increase in the cost of living that surpasses income growth can erode purchasing power despite higher nominal wages.