Which metric is commonly reported as the percentage increase in the average price level from month to month or year to year?

• A. GDP
• B. Unemployment rate
• C. Inflation rate
• D. Economic indicators

Answer: (C)

Inflation rate captures how fast the overall price level is rising, and it is always expressed as a percentage change over time. It shows how much prices, on average, have increased from one month to the next or from one year to the next, using price indices like the CPI or the GDP deflator. That month-over-month or year-over-year percentage change is exactly what people mean by the inflation rate. Other options describe different concepts: GDP is total output, unemployment measures joblessness, and economic indicators is a broad category of data, not a single price-change metric.