Inflation Simply Indicates That

question 130

Multiple Choice

Inflation simply indicates that:

• A) the stock market has crashed.
• B) unemployment has reached double digits.
• C) nominal prices have risen.
• D) government bonds are worthless.

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Definitions:

Market Price

The current value at which an asset or service can be bought or sold in an open market.

Economies of Scale

The economic benefits that businesses gain from their size of operations, where the expense per unit of production typically lowers as the scale increases.

Increasing Returns

A situation in which an increase in the scale of production results in a disproportionate increase in output, usually leading to lower average costs.

Suffer Losses

occurs when a business or individual incurs expenses that exceed their revenues.