Inflation is best defined as
Answer and explanation
Correct answer: B. a sustained rise in the general price level
- Step 1: Inflation means money buys less over time. Answer: a sustained rise in the general price level. Why not the others: a rise in the price of one product: That is a relative price change. a fall in the value of exports: That is a trade matter. an increase in the money supply only: That may cause inflation but it is not the definition.
Practise more National income, money and government.
Free questions with an explanation for every one, and full timed KASNEB CPA Foundation Level (Kenya) mock tests.
More National income, money and government questions
- Gross Domestic Product measures
- Which of these is included in GDP?
- GDP at market prices is KSh 5,000 billion and net property income from abroad is KSh 200 billion. What is GNP?
- If nominal GDP rises by 12% and the general price level rises by 7%, real GDP grew by about
- Which of the following is a cause of cost-push inflation?
- The Central Bank of Kenya's role includes