Inflation means
A)Specific prices are rising,and relative prices are falling.
B)Both relative prices and average prices are rising.
C)Relative prices are rising,but it is not certain what is happening to average prices.
D)Average prices are rising,but it is not certain what is happening to relative prices.

Question

Quizplus · Accepted Answer

Inflation refers to a sustained rise in the average prices of goods and services in an economy over time. While it may also result in a rise in relative prices (i.e., the prices of one good compared to another), this is not a necessary condition for inflation. Therefore, option D is the correct answer as it states that average prices are rising, but it is uncertain about the direction of relative prices.

Inflation Means