Final answer:
During the American Revolution, the increase in prices of goods is an indicator of inflation. Historical examples show that prices for essential goods can rise drastically during periods of high inflation, as evidenced by both the American Revolution and the situation in Israel in 1985.
Step-by-step explanation:
During the American Revolution, the fact that the prices of goods went up is a sign of inflation. Such economic conditions were common during times of war due to increased demand for goods and supply shortages. An example can be seen from the wartime period when prices for certain imported goods and staples rose drastically, indicating a significant inflationary period. The price of beef, for instance, escalated considerably from $0.04 a pound in 1777 to $1.69 a pound in 1780, signaling a drastic inflation rate. The consequences of inflation can lead to everyday challenges, such as in Israel during 1985 where the annual inflation rate hit 500%, and prices on goods changed so frequently that they could not be labeled effectively.