According to Economists, What Is Inflation

question 57

Multiple Choice

According to economists, what is inflation?

• A) a general decrease in the level of prices
• B) a general rise in the level of prices
• C) when the economy grows two quarters in a row
• D) a function of the size of the labour force

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Definitions:

Price Ceiling

A legally established maximum price that can be charged for a product or service, often set by government to prevent prices from reaching too high levels.

Price Floor

A government-set minimum price at which a product can be sold, aimed to prevent the price from falling too low.

Shortage

A market condition where the quantity demanded of a good exceeds the quantity supplied at the current price, leading to upward pressure on price.

Surplus

The situation in which the quantity of goods produced exceeds the quantity of goods demanded. Surpluses can result in price drops for products or services, reflecting a mismatch in supply and demand.