Question

Inflation is defined as a rise in the general level of prices. When inflation occurs, the prices _________

Answer 1

Increase rapidly or inflates up rapidly

Step-by-step explanation:

Inflation, a popular term in economics that tells us about the rate or frequency at which the average price level of goods and services in an economy increases over a period of time.

The three classifications or causes of inflation are:

1. Demand-Pull inflation,

2. Cost-Push inflation,

3. Built-In inflation.

This rapid price increase may be as a result of an increase in labor costs or increase in demand of for goods and services in an economy and has limited supply.