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

Question

Quizplus · Accepted Answer

Inflation refers to a persistent increase in the general level of prices as measured by a price index, such as the Consumer Price Index (CPI). It is not a temporary increase in prices, nor is it limited to the price of one particular commodity. In fact, inflation can affect the prices of many goods and services across an economy. Lastly, inflation does not result in an increase in the purchasing power of the dollar, as the value of money decreases as prices increase.

The Best Definition of Inflation Is