The correct answer is A. Inflation.
Explanation:
1. Inflation is the term used to describe the general increase in prices of goods and services in an economy over a period of time.
2. When there is inflation, the purchasing power of the currency decreases because you need more money to buy the same amount of goods or services.
3. So, if purchasing power and prices are rising, it indicates inflationary pressure in the economy.
In summary, the situation described in the question where purchasing power and prices are rising is indicative of inflation.
