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Inflation is an increase in:

a. prices of all products in the economy.
b. homes, autos and basic resources.
c. the general price level of products.
d. none of these.

1 Answer

2 votes

Final answer:

Inflation is a continuous rise in the general price level of an entire economy, measured by the consumer price index, and differs from one-time price changes.

Step-by-step explanation:

Inflation is the term used to describe a general and ongoing rise in the level of prices in an entire economy. Inflation indicates a sustained pressure for prices to increase across most markets in the economy, contrasting with one-time price changes that represent shifts from one equilibrium to another.

It is measured using tools such as the consumer price index (CPI), and a major goal for economies is to maintain low inflation rates, typically around 1–2%, to preserve the standard of living.

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