Which situation is described by the term "inflation"?
A) The overall level of prices in the economy is increasing.
B) Incomes in the economy are increasing.
C) Stock market prices are rising.
D) Nominal interest rates in the economy are rising.

Question

Quizplus · Accepted Answer

Inflation is a term used to describe the overall increase in the level of prices in an economy, which leads to a decrease in the purchasing power of money. This can happen for various reasons, including an increase in the money supply, a decrease in the supply of goods and services, or an increase in demand. Inflation can have significant impacts on the economy and individuals, such as reducing the value of savings, increasing the cost of borrowing, and impacting investment decisions.

Which Situation Is Described by the Term "Inflation