ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A general increase in prices.
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An increase in prices of key items purchased by consumers.
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The increase in the value of fiat money
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The printing of too much paper money.
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Detailed explanation-1: -Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.
Detailed explanation-2: -The inflation rate is the percentage change in the price index for a given period compared to that recorded in a previous period. It is usually calculated on a year-on-year or annual basis.
Detailed explanation-3: -However, if one goes by Samuelson-Nordhaus definition of inflation, a rise in the general level of prices is inflation. It means that any rise in the general price level over and above the base-year level is inflation.
Detailed explanation-4: -Inflation is the general rise in the prices of goods and services in an economy, over a period of time. It reduces the purchasing power of consumers, because each unit of currency can purchase fewer products with an increase in the general price levels.
Detailed explanation-5: -Price inflation is an increase in the price of a collection of goods and services over a certain time period. Strong demand and supply shortages tend to cause price inflation. Price inflation can also be caused by the cost of inputs to the production process increasing.