Economics • Economic BasicsEasy
What is meant by creeping inflation?
A. Hyperinflation exceeding one thousand percent annually
B. A slow and steady rise in the general price level over a long period✓ Correct Answer
C. A sudden spike in food prices due to crop failure
D. Negative inflation or a sustained fall in price levels
💡 Solution & Explanation
Creeping inflation refers to a slow, mild, and predictable rate of price increase, typically ranging between one and three percent annually, which economists often view as healthy for economic growth. Hyperinflation represents extreme runaway price surges, supply shocks cause temporary commodity price spikes, and deflation denotes falling price levels. Central banks target low single-digit inflation to maintain purchasing power stability.
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