The inflation rate is the
A)measure used to calculate the price level.
B)measure used to calculate the cost of borrowing money.
C)percentage increase in the average level of prices.
D)percentage increase in the average level of wages.

Question

Quizplus · Accepted Answer

The inflation rate is the percentage increase in the average level of prices. It measures the rate at which the general price level of goods and services in an economy is rising. Option A is incorrect because although the inflation rate is used to calculate the price level, it is not the measure used to calculate it. Option B is incorrect because the cost of borrowing money is calculated using interest rates, not inflation rates. Option D is incorrect because the inflation rate is not the percentage increase in the average level of wages, but rather the prices of goods and services.

The Inflation Rate Is the