Inflation is best defined as
A) a sustained increase in the price of ALL goods and services in an economy.
B) a relative price increase.
C) a sustained increase in the average of all prices of goods and services in an economy.
D) a sustained increase in the price of a single good or service.

Question

Quizplus · Accepted Answer

Inflation is defined as a sustained increase in the average price of all goods and services in an economy over a period of time. This means that not all prices may increase, but there is an overall upward trend in the average price level. Choice A is incorrect because inflation does not necessarily apply to all goods and services. Choice B is incorrect because it suggests that only certain prices are affected. Choice D is incorrect because inflation refers to a sustained increase in the price level, not just a single good or service.

Inflation Is Best Defined as