Inflation is defined as:
A) The level of prices at full-employment.
B) An increase in the price of expensive items,such as cars.
C) An increase in the average level of prices.
D) An increase in relative prices.

Question

Quizplus · Accepted Answer

Inflation is typically defined as an increase in the average level of prices over time. Option A is incorrect as full employment has no direct relationship with inflation. Option B is incorrect because inflation encompasses all goods and services, not just expensive items. Option D is also incorrect because inflation affects all prices in an economy, not just relative prices.

Inflation Is Defined As