Which of these is an accurate statement about the effect of inflation?

When inflation increases, interest rates on your credit cards, adjustable-rate mortgages, or car loans usually decrease.
Inflation has no effect on interest rates.
When inflation inc

The correct statement is: When inflation increases, interest rates on your credit cards, adjustable-rate mortgages, or car loans usually increase. Inflation has no direct effect on the economy, but it can have an indirect effect by changing the purchasing power of consumers and businesses, affecting production, unemployment, wages and prices.