Multiple choice

Whenever there is an increase in inflation

  1. there is an increase in the average level of prices in goods and services

  2. there are less goods and more buyers

  3. there will be an increase in bank interest rate

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Inflation involves a general rise in price levels, often driven by demand exceeding supply (more buyers for fewer goods). In response, central banks typically increase interest rates to control the money supply and curb spending.

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