What is inflation defined as?

Inflation is accurately defined as a continuous rise in prices for goods and services within an economy over a period of time. This phenomenon indicates that as prices increase, the purchasing power of money decreases, meaning that consumers must spend more money to buy the same amount of goods and services than they did in the past.

When inflation occurs, it can have various effects on the economy, influencing the cost of living, interest rates, and purchasing power. A stable level of inflation is generally seen as a sign of a growing economy, but excessive inflation can lead to economic instability and decrease consumer confidence.

The other choices relate to different economic concepts. A decrease in the value of currency reflects a consequence of inflation rather than its definition; an increase in employment rates pertains to labor markets and job availability; and stability in economic growth signifies a consistent GDP growth rate without significant fluctuations, which is not directly related to inflation. Therefore, the choice of continuous rise in prices for goods and services is the most accurate definition of inflation.