The faster the drop in the purchasing power of money, the faster the
A) drop in the inflation rate.
B) drop in the deflation rate.
C) increase in the deflation rate.
D) 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 a decline in the purchasing power of money means that prices are increasing, which is a key characteristic of inflation.

The Faster the Drop in the Purchasing Power of Money