Inflation Occurs When an Increase in the Price of Goods

question 104

True/False

Inflation occurs when an increase in the price of goods or services is more than offset by an increase in quality.

---

Definitions:

Consumer Surplus

The gap between the price consumers are ready to offer for a good or service and the effective amount they spend on it.

Trade

The process of purchasing, vending, or trading products and services among individuals or nations.

Factor Endowments

The amount of land, labor, capital, and entrepreneurship that a country or region possesses, which determines its comparative advantage in international trade.

Comparative Advantage

The ability of an individual or entity to produce goods or services at a lower opportunity cost than other producers.