The best definition of inflation is a(n):
A) temporary increase in prices.
B) increase in the price of one important commodity such as food.
C) persistent increase in the general level of prices as measured by a price index.
D) increase in the purchasing power of the dollar.

Question

Quizplus · Accepted Answer

Inflation refers to a continuous or persistent increase in the general level of prices across a broad range of goods and services, which is usually measured by a price index such as the Consumer Price Index (CPI). It is not a temporary increase in prices, nor is it necessarily limited to a single commodity like food. Inflation also reduces the purchasing power of the currency, so option D is incorrect.

The Best Definition of Inflation Is A(n)