Inflation is defined as:
A) an increase in the overall level of prices.
B) the rate of growth in nominal GDP.
C) a situation where all prices in the economy rise simultaneously.
D) the growth phase of the business cycle.

Question

Quizplus · Accepted Answer

Inflation refers to an increase in the overall level of prices in the economy. This means that the prices of goods and services are on average rising, and the purchasing power of money is decreasing over time. B, C, and D are not accurate definitions of inflation.

Inflation Is Defined As