Answer: Option D
Answer: (d)
Inflation is a persistent increase in the general price level of goods and services in an economy over a period of time.
When the general price level rises, each unit of currency buys fewer goods and services.
Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value.
High inflation means the excessive supply of money and thus leads to a rise in the cost of credit and interest rates.
Higher inflation leads to a reduction in economic growth, a decrease in the cost of credit, increase in spending rather than saving as the value of money is declining.