Question

The term inflation is used to describe a situation in which

a. the overall level of prices in the economy is increasing.b. incomes in the economy are increasing.c. stock-market prices are rising.d. the economy is growing rapidly.

Answer 1

Answer: The correct answer is Choice A.

Explanation: The term inflation is used to describe a situation in what the overall level of prices in the economy is increasing.

The measure of inflation is the Inflation Rate. This is the annualized percentage change in a general price index (usually the consumer price index) over time.