Which of the following best describes inflation?

Question

Quizplus · Accepted Answer

Inflation refers to the increase in the general price level of goods and services within an economy. Option A is incorrect because an increase in the sale of stocks on the stock market does not necessarily relate to inflation. Option C is incorrect because an increase in currency in the money supply may not necessarily lead to inflation if there is a corresponding increase in the demand for money. Option D is incorrect because an increase in the purchasing power of foreign currency refers to a strengthening of the domestic currency and is not related to inflation. Option E is incorrect because a decrease in salaries of members of the government does not necessarily relate to inflation.

Which of the Following Best Describes Inflation