Question

An example of inflation is, if the amount of money in a country doubled, but the production of goods and services stayed the same, the price of all goods and services would decline by about half, assuming that other factors, such as external trade, were constant.

A. True
B. False

Answer 1

Answer:

B. False

Explanation:

Inflation is the sustained rise in price level, where a unit of currency is able to buy less goods and services.

With the same amount of goods and services and double the amount of money and other factors being constant it should lead to inflation. But the result should be that the price of all goods and services more or less double, not "decline by about half."