Question

Upward movement in prices in per annum terms is known as ............... .

• A. Inflation
• B. Deflation
• C. Increase
• D. Decrease

Hint:

Remember: Rising prices = Inflation; Falling prices = Deflation.

Answer 1

The Correct Option is A

Inflation is the term used to describe the sustained increase in the general price level of goods and services over a period of time, usually measured yearly.
When inflation occurs, each unit of currency buys fewer goods and services, meaning the purchasing power of money decreases.
Central banks and governments monitor inflation closely because it affects the cost of living, savings, and economic growth.
Deflation, on the other hand, is the opposite — a sustained decrease in prices.
‘Increase’ and ‘Decrease’ are generic terms and do not specifically define the economic phenomenon.
Therefore, the correct answer is option (A) Inflation.