Inﬂation means that
A) all prices are rising, but at different rates.
B) all prices are rising at approximately the same rate.
C) prices on average are rising, although some particular prices may be falling.
D) real incomes are rising.

Question

Quizplus · Accepted Answer

Inflation means that prices on average are rising, although some particular prices may be falling. Real incomes may not necessarily be rising with inflation. A and B are not accurate descriptions of inflation as all prices may not be rising, and if they are, they may not be rising at the same rate.

Inﬂation Means That