Which of the following correctly de?nes in?ation?
A) In?ation is the aggregated level of prices of essential goods in an economy.
B) In?ation is an absolute measure of the prices of all the goods produced in an economy.
C) In?ation is the average level of prices in an economy.
D) In?ation is the rate of change in the average price level in an economy.

Question

Quizplus · Accepted Answer

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. It is measured as an annual percentage increase. Therefore, it is the rate of change in the average price level in an economy, not just a measure of price levels at a point in time.

Which of the Following Correctly De?nes In?ation