The change in the cost of living over time is referred to as
A) Inflation
B) Substitution bias
C) A fixed-weight price index
D) Real income

Question

Quizplus · Accepted Answer

Inflation refers to the increase in the general price level of goods and services in an economy over a period of time, resulting in a decrease in the purchasing power of money. Inflation is calculated using price indexes such as the Consumer Price Index (CPI) or the Producer Price Index (PPI), which track the change in the cost of a basket of goods and services commonly purchased by consumers or producers. Thus, the change in the cost of living over time is best referred to as inflation.

The Change in the Cost of Living Over Time Is