When There Is Inflation in the Economy, It Implies That

question 27

Multiple Choice

When there is inflation in the economy, it implies that the:

• A) Price index is rising and the purchasing power of money is also rising
• B) Price index is falling and the purchasing power of money is also falling
• C) Price index is falling and the purchasing power of money is rising
• D) Price index is rising and the purchasing power of money is falling

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Definitions:

Long-term Memory

A type of memory responsible for the storage of information over an extended period.

Cognitive Dissonance

A psychological phenomenon involving discomfort felt by an individual when holding conflicting thoughts, beliefs, or attitudes, especially in relation to their actions.

Elaborative Rehearsal

A way of increasing the number of retrieval cues for information by connecting new information with something that is already well known.

Maintenance Rehearsal

A cognitive process involving the repetition of information to keep it in short-term memory for longer periods.