Inflation is best defined as an increase in:
A) the real price of a good or service.
B) the price of one product relative to the price of another product.
C) all prices in an economy.
D) the average price level.

Question

Quizplus · Accepted Answer

Inflation is a general increase in the average price level of goods and services over time. Option A refers to an increase in the relative price of a specific good or service, not the general price level. Option B refers to a change in relative prices, not a general increase in the price level. Option C is also incorrect as not all prices in an economy will necessarily increase during a period of inflation.

Inflation Is Best Defined as an Increase In