Which of the Following Statements Is NOT True About Inflation

question 252

Multiple Choice

Which of the following statements is NOT true about inflation?

• A) Inflation is a sustained increase in the average prices of goods in the economy.
• B) During an inflationary period, the prices of some goods will increase while the price of some goods will decrease.
• C) When there is inflation, the purchasing power of a dollar decreases.
• D) During an inflationary period, the prices of all goods will increase.

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Definitions:

Price

The amount of money required to purchase a good, service, or asset.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's cost.

Simple Interest

Interest that is determined just on the original amount, or on the remaining unpaid portion of that amount.

Government of Alberta

The provincial government responsible for public policy, regulation, and administration in the province of Alberta, Canada.