The term inflation is used to describe a situation in which
A)the overall level of prices in the economy is increasing.
B)incomes in the economy are increasing.
C)stock-market prices are rising.
D)the economy is growing rapidly.

Question

Quizplus · Accepted Answer

Inflation refers to the overall increase in the level of prices in an economy, which means that the purchasing power of currency decreases. Inflation can be caused by various factors, such as excessive demand, cost-push factors, and changes in the money supply. Therefore, option A is the correct choice. Option B, C, and D are not directly related to the concept of inflation.

The Term Inflation Is Used to Describe a Situation in Which