2007-03-09 01:05:11 · 4 answers · asked by Lala 1 in Social Science ➔ Economics
Price increases are what cause inflation. When you see that inflation in the US is, say, 2%, all they are saying is this:
When we looked at a basket of goods that an average US family consumes, the prices of said goods have increased an average of 2% compared to the same period of last year.
2007-03-09 01:38:06 · answer #1 · answered by MSDC 4 · 0⤊ 0⤋
It depends on what you mean by "price increase". Are you referring to the price of one good, or the general price of goods in an economy?
Inflation is the rate of increase in the overall price of goods in an economy. So, if that is what you mean by "price" then the two concepts are the same.
However, you can have positive inflation -- average prices are rising -- and some goods' prices could actually fall.
2007-03-09 17:40:23 · answer #2 · answered by Allan 6 · 0⤊ 0⤋
Inflation is economy driven while price increase is consumer demand driven.
For instance, prices go up gradually because expenses such as gas, parts, and labor go up. That's inflation.
A company consistently sells out of their $10 widgets as soon as they're available because everybody wants one. So the company says "Hey! I bet we can get $12 for these!". That's price increase.
2007-03-09 09:12:16 · answer #3 · answered by pater47 5 · 2⤊ 0⤋
It sounds the same to me.
2007-03-09 09:08:19 · answer #4 · answered by Anonymous · 0⤊ 0⤋