The faster the drop in the purchasing power of money,the
A)faster the drop in the inflation rate.
B)faster the drop in the deflation rate.
C)faster the increase in the deflation rate.
D)the faster the increase in the inflation rate.

Question

Quizplus · Accepted Answer

The faster the drop in the purchasing power of money, the faster the increase in the inflation rate. This is because when the purchasing power of money decreases, it takes more money to buy the same amount of goods and services, leading to a general increase in prices across the economy, which is the definition of inflation.

The Faster the Drop in the Purchasing Power of Money,the