What is the term for the rate at which the price for goods and services increases over time?

The term that describes the rate at which the price for goods and services increases over time is inflation. Inflation reflects a general rise in prices, which typically implies a decrease in the purchasing power of currency. It can be caused by various factors, including demand-pull inflation (where demand exceeds supply), cost-push inflation (where production costs rise), or built-in inflation (where businesses increase prices to keep up with rising wages).

Understanding inflation is crucial for economic analysis as it affects everything from individual purchasing power to business costs and government policy decisions. When inflation is moderate, it can be a sign of a growing economy, but when it becomes excessive, it can lead to economic instability and uncertainty. Thus, recognizing and measuring inflation helps policymakers and businesses make informed decisions regarding investments, spending, and pricing strategies.