Inflation Explained
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Questions and Answers

Which of the following is a reason why prices can increase due to inflation?

  • More people want to buy the same things (correct)
  • The cost of production decreases
  • The stores want to make more profit
  • The government wants to control the economy

    • What is one effect of inflation?

  • Decreased demand for goods and services
  • Increased cost of living (correct)
  • Increased purchasing power of consumers
  • Decreased profits for businesses

    • Why do businesses often raise prices when their production costs increase?

  • To cover their increased costs (correct)
  • To decrease demand for their products
  • To control inflation
  • To make more profit

    • What is inflation?

    <p>When prices at the store slowly go up over time</p> Signup and view all the answers

    What can cause inflation?

    <p>Increased population</p> Signup and view all the answers

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