Inflation is defined as the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.

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What Is Inflation

Question 4

Multiple Choice

What is inflation?

A) the pace at which gross domestic product expands
B) the speed with which the money supply expands -Consider This: This is controlled through government's monetary policies.
C) the rate at which prices for goods and services increase
D) increasing federal taxes

Correct Answer: