How does inflation influence an economy?

A. It causes international trade to rise.
B. It causes unemployment rates to fall.
C. It causes the value of money to fall.
D. It causes the price of goods to decline.

Question

26-06-2024
Social Studies

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How does inflation influence an economy?

A. It causes international trade to rise.
B. It causes unemployment rates to fall.
C. It causes the value of money to fall.
D. It causes the price of goods to decline.

Sagot :

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GinnyAnsweridn GinnyAnsweridn · Answer 1 · 2024-06-26T16:50:12-04:00

Final answer:

Inflation causes the value of money to fall, reducing its purchasing power and impacting international trade.

Explanation:

Inflation influences an economy by causing the value of money to fall. As prices rise due to inflation, the purchasing power of money decreases, leading to a situation where the same amount of money buys fewer goods and services. This can impact international trade by affecting exchange rates and trade balances.

Learn more about Inflation's influence on an economy here:

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Final answer:

Explanation:

Learn more about Inflation's influence on an economy here:

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