Asked by Katelynd Hayward on Jul 11, 2024
Verified
Which of the following is an important cause of inflation in an economy?
A) Increases in productivity in the economy
B) The influence of positive externalities on the economy
C) Lack of property rights in the economy
D) Growth in the quantity of money in the economy
Inflation
The acceleration in the average cost of living, evidenced by goods and services prices rising, and thereby lessening buying power.
Quantity of Money
The total monetary resources sum available in an economy at a particular point in time.
Productivity
Measures the efficiency of production as output per unit of input, essential for economic growth and competitiveness.
- Understand the factors contributing to inflation and its effects on an economy.
Verified Answer
AM
Alexandria MosleyJul 14, 2024
Final Answer :
D
Explanation :
Growth in the quantity of money in the economy can lead to inflation because it increases the amount of money chasing the same amount of goods and services, which can drive prices up.
Learning Objectives
- Understand the factors contributing to inflation and its effects on an economy.