Inflation is___________________?
Correct answer: B. an increase in the overall price level.
- A. a decrease in the overall price level.
- B. an increase in the overall price level.
- C. an increase in the overall level of economic activity.
- D. a decrease in the overall level of economics activity
Explanation
Inflation is a sustained rise in the general or overall price level, which reduces the purchasing power of money. A rise in economic activity is a separate concept and is not inflation itself.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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