In times of rising prices, which of the following best describes the economic phenomenon occurring?

• A. Stagflation
• B. Recession
• C. Deflation
• D. Inflation

Answer: (D)

Verified step by step guidance

1. Understand the key terms: Inflation refers to a general increase in prices across the economy, reducing the purchasing power of money.
2. Identify the economic phenomenon described: 'Rising prices' directly point to inflation, as it means the average price level is going up.
3. Compare with other options: Stagflation involves rising prices plus stagnant economic growth; recession is a period of economic decline; deflation is a decrease in the general price level.
4. Since the problem only mentions rising prices without additional context like economic stagnation or decline, the best description is inflation.
5. Therefore, the correct economic phenomenon occurring during rising prices is inflation.