Final answer:
The inflation rate is the term used to describe the rate at which the general level of prices for goods and services is rising, measured as the percentage change in the price level of a basket of goods.
Step-by-step explanation:
The rate at which the general level of prices for goods and services is rising is referred to as the inflation rate. In a modern economy, there are countless goods and services available, and their prices are influenced by the forces of supply and demand. Economists address the complexity of tracking price changes through an aggregate measure. They create a weighted average of the prices for a standard set of goods and services, often called a basket of goods. The inflation rate is the percentage change in this consolidated price level over time. When the general price level rises, each unit of currency buys fewer goods and services, which is the essence of inflation.