Inflation means ?
Correct answer: C. Rise in general price index
- A. Rise in budget deficit
- B. Rise in money supply
- C. Rise in general price index
- D. Reflection
Explanation
Inflation is identified by a sustained rise in the general price index, not merely by a larger budget deficit or money supply. Those factors can contribute to inflation but do not define it.
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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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