Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 22: Q 13 (page 553)

What is the difference between the price level and the rate of inflation?

Short Answer

Expert verified

we can say that inflation is basically a percentage change in price level.

Step by step solution

01

Step 1. Price level 

Price level is basically the average of current prices of entire or whole spectrum of goods and services that are produced by economy.

02

Step 2. Inflation

It is measure of rate of change in prices of goods and services in the economy over time. A general progressive increase in demand for products and services can cause inflation the reason behind this is consumers are willing to pay more for the product.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Inflation rates, like most statistics, are imperfect measures. Can you identify some ways that the inflation rate for fruit does not perfectly capture the rising price of fruit?

Do you think perfect indexing is possible? Why or why not?

What has been a typical range of inflation in the U.S. economy in the last decade or so?

Over the last century, during what periods was the U.S. inflation rate highest and lowest?

What is deflation?
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free