Which is the best definition of inflation? (A) a gradual reduction in the price of goods and services (B) a gradual expansion in the price of goods and services (C) an exponential reduction in the price of goods and services (D) an exponential expansion in the price of goods and services

Succinctly, inflation is the gradual expansion in the price of goods and services. The more extreme type of inflation is called hyperinflation, where prices of goods and services expand exponentially. Contrary to common knowledge, inflation is not necessarily a bad thing. Economists attribute a manageable inflation to a growing economy.

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rachmaniaputr rachmaniaputr · Answer 2 · 2019-10-10T09:24:33+02:00

The answer is B. Inflation is a gradual expansion in the price of goods and services.

EXPLANATION

Inflation is an economic term. Inflation is basically the increase or expansion in the price of goods and services over time. Inflation will gradually increase the cost of your daily living. Year by year, you either have to earn more money, or lower your lifestyle, because there will definitely be an increase in food prices, haircuts, or even in filling out your gas tank.

In a detailed explanation, inflation will reduce the value of money over the year. Inflation reduces the purchasing power of each currency unit. To make it clearer, let’s use the US as an example. The inflation in the US caused dollar value to be lower and lower each year. If you compare dollar value the past and dollar value now, it will be vastly different. The money will buy less, as the price of goods and services will rise. Inflation basically can reduce your standard of living if you do not earn more over the year.

There are several main causes of inflation, but there are two main causes of inflation. The main causes are cost-push inflation and demand-pull inflation. Cost-push inflation happens when the demand for goods and services are not increasing, but the raise of the goods or services increase. Meanwhile, Demand-pull inflation will happen if the goods and services demand our spaces the supply.

LEARN MORE

If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:

Definition of inflation: https://brainly.com/question/12107185

Command economy: https://brainly.com/question/10877298

KEYWORD: inflation, increase, goods, cause of inflation, cost-push inflation, demand-pull inflation

Subject: Social Studies

Class: 10-12

Subchapter: Inflation