Question

What happens during inflation?

Responses

Prices fall and people start spending again.

Prices fall and people start spending again.

The value of a dollar does not change.

The value of a dollar does not change.

There's more money in circulation and the prices rise.

There's more money in circulation and the prices rise.

People have less income.

People have less income.

Answer 1

[AI-generated answer — Bot GPT 3.5]

During inflation, there is more money in circulation, which leads to a general increase in prices. As a result, the value of a dollar decreases, and people may have less income in real terms. Inflation does not typically cause prices to fall; instead, it causes prices to rise.