Question

A substantial rise in prices related to an increase in the amount of money available, resulting in the loss of value of currency is called ____________. a. deflation b. inflation c. shortfall d. agriculture

Answer 1

b. Inflation

Step-by-step explanation:

Inflation is the rise of the general level of price of goods and services in an economy, within a period of time (usually a year).

As the question explains, inflation occurs when the amount of money available, the money supply, increases faster than the production of goods and services.

This lower the value of the currency, causing the price of goods and services to rise, because more units of currency are needed to buy the same things as before.