Which phrase best describes inflation? General rise in prices over time Sudden, sharp increase in prices Decline in currency exchange rates Gradual decline the price level

## Step 1<br />Inflation is a term used in economics to describe a general rise in prices over time. This means that the purchasing power of money decreases, meaning that the same amount of money can buy fewer goods and services than it could before.<br /><br />## Step 2<br />The other options provided do not accurately describe inflation. A sudden, sharp increase in prices is more indicative of hyperinflation, which is a very high and accelerating rate of inflation. <br /><br />## Step 3<br />A decline in currency exchange rates is not the same as inflation. While a decline in currency exchange rates can lead to inflation, it is not the definition of inflation.<br /><br />## Step 4<br />A gradual decline in the price level is the opposite of inflation. This is known as deflation, which is a decrease in the general price level of goods and services.