What term is used to describe a general and sustained upward movement in the overall price level of goods and services in an economy over time?

💡 Solution & Explanation

Inflation denotes the rate at which the general price level of goods and services rises, eroding purchasing power over time. Deflation represents a sustained decrease in the general price level of goods and services, often associated with contracting economic activity. Stagflation combines stagnant economic growth with high unemployment and high inflation. Inflation is typically measured using price indices such as the Consumer Price Index and Wholesale Price Index.