Question

What occurs when there is a lot of money in circulation, but it is worth less and prices are rising? A. inflation B. shortage C. deflation D. recession

Answer 1

A) Inflation is what occurs when there is a lot of money in circulation, but it is worth less because prices are rising. High inflation is a major concern of most modern economies and central banks work to prevent inflation from occurring. 

Answer 2

Answer: A. inflation

Explanation:

Inflation is an economic condition in which there is sustained increase in the general price levels in the economy. This involves the sudden increase in the cost of goods and services. This is because of excessive growth of money supply or circulation. The parameters on which inflation rate can be judged includes the general price index and consumer price index.