Which of the following best describes inflation?

Inflation is best described as a general increase in prices over time, which reflects the overall change in the price level of goods and services in an economy. This phenomenon can erode purchasing power, meaning that over time, individuals find that their money buys fewer goods and services than it did before. Inflation is typically measured through price indices like the Consumer Price Index (CPI), which captures the average change over time in the prices paid by consumers for a market basket of goods and services.

The other options detail scenarios that do not adequately capture the essence of inflation. A decrease in the prices of goods refers to deflation, which is the opposite of inflation. Price stability refers to a situation where prices remain relatively unchanged over time, which again contrasts with the concept of inflation. Finally, a temporary spike in prices might happen due to supply chain issues or other short-term factors, but it does not reflect the consistent, overarching trend that defines inflation as it relates to the economy's general price level over a longer period.