Question

Identify the incorrect statement from the following: 

Options

• Inflation is a state in which value of money is falling.

• Higher the price level, the lower is the power of money to purchase. 

• Inflation is always associated with a persistent rise in the prices.

• None of these 

Answer 1

None of these

Explanation:

1. Inflation is a condition characterised by a decline in money's value, which reduces purchasing power as prices rise.
2. This theory is also valid, as increasing prices decrease money's purchasing power, allowing you to buy less for the same amount of money.
3. Inflation is often associated with a steady price rise; however, the rate and amount may vary.