Question

select the correct answer.

what effect does inflation have on the prices of goods and services?

prices decrease.
prices double.
prices increase.
prices stay the same.

Explanation:

Define inflation

Inflation is defined as a general and progressive increase in the prices of goods and services in an economy over time.

Analyze the options

• "Prices decrease" describes deflation, which is the opposite of inflation.
• "Prices double" is a specific rate of inflation (hyperinflation or high inflation over time), but not the general definition.
• "Prices increase" directly matches the fundamental definition of inflation.
• "Prices stay the same" describes price stability.

Select the correct option

The correct option is "Prices increase."

Answer:

• Prices decrease.
• Prices double.
• Prices increase. (Correct answer)
• Prices stay the same.