Which of the Following Statements About Inflation Is Correct

question 215

Multiple Choice

Which of the following statements about inflation is correct?

• A) Inflation increases the purchasing power of consumer dollars.
• B) The consumer price index is one way to measure inflation.
• C) Inflation occurs when people have more money to spend as the quantity of goods available increases.
• D) Inflation occurs when the amount of money taken out of the economy exceeds the amount of money put into the economy.
• E) Inflation and deflation are really almost synonymous in practice.

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Definitions:

Exponential Equation

An equation in which the variable appears in the exponent and the base is a constant.

Decimal Places

Positions to the right of the decimal point in a number, used to specify precision.

Exponential Equation

An exponential equation is one in which the variable appears in the exponent, for example, \(2^x = 8\).

Decimal Places

In a numerical value, decimal places denote the quantity of digits after the decimal point, such as two decimal places in 12.34.