Inflation often accompanies?

Question

a.expansion

b.contraction

c.depression

Answer 1

The answer is expansion: A.

Inflation is when too many dollars are chasing too few goods. In times of rapid expansion, there is alot of loans being made, and alot of money being exchanged. This leads to overspending and inflation.

If you don't believe me, research the Phillips curve which shows that there is a trade off between inflation and unemployment. When Unemployment is low (expansion), inflation is high, when Unemployment is high (Contraction or depression), inflation is low.

Answer 2

b