What is one reason prices might rise in an economy?

An increase in money supply and incomes can lead to rising prices in an economy due to the basic principles of supply and demand. When the money supply increases, consumers have more money to spend, which can boost demand for goods and services. If demand exceeds supply, prices tend to rise as sellers respond to the higher demand by increasing their prices.

Additionally, when incomes rise, consumers have more purchasing power. This heightened ability to spend can further drive up demand for various products, amplifying the pressure on prices. Consequently, when both the money supply and consumer incomes grow simultaneously, it creates an environment conducive to inflation, resulting in a general increase in prices across the economy.

This option accurately captures the relationship between monetary policy and price levels, while the other options relate to different economic dynamics that typically do not result in rising prices.