Price Levels

Price levels refer to the overall average prices of goods and services within an economy or market at a certain point in time. They indicate whether prices are generally rising (inflation) or falling (deflation). Think of it as the general price "temperature"—a higher level means prices are higher across the board, while a lower level means prices are lower. Tracking price levels helps economists understand economic stability and make forecasts about future inflation or deflation, guiding monetary policy and decision-making for businesses and consumers.