The correct answer to the question is C. The level of prices in a country would be negatively affected by an inflow of money.
When there is an inflow of money into a country, it increases the supply of money in the economy. As a result, the value of money decreases and the purchasing power of consumers is reduced. This leads to an increase in the general level of prices, also known as inflation. Therefore, the level of prices in a country would be negatively affected by an inflow of money.
To understand this concept, let's consider an example. Imagine a country where there is a sudden increase in foreign investment, resulting in a significant inflow of money. As the supply of money increases, people will have more money to spend. This increased demand for goods and services will drive up prices, as businesses can charge higher prices since there is more money in circulation.
It's important to note that this is just one factor influencing the level of prices in a country, and there are other factors such as production costs, supply and demand dynamics, and government policies that also play a role. However, in the context of the given question, the correct answer is that the level of prices in a country would be negatively affected by an inflow of money.
In conclusion, the correct answer to the question is C. The level of prices in a country would be negatively affected by an inflow of money. When there is an increase in the supply of money, it leads to inflation and reduces the purchasing power of consumers, resulting in higher prices.