Explain why when the price of one good or service rises it is not inflation; but...
Explain why when the price of one good or service rises it is not inflation; but when average prices rises there is inflation.
Homework Answers
Inflation is the increase in the general price level in not the increase in the price of one particular good. When there is an increase in the price of one good or service, it might be possible that other goods and services experience a reduction in the price. This would not change the general price level and hence there will not be an inflation. however when most of the goods and services experience an increase in their prices, there is an increase in the overall price level which is then termed as inflation.
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Explain why when the price of one good or service rises it is
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