Which of the following best describes "inflation"?

Inflation is best described as the general rise in prices of goods and services over time. This phenomenon indicates that, on average, consumers must spend more money to purchase the same amount of goods and services than they would have in a previous time period. This process can erode purchasing power, effectively meaning that money buys less than it did before.

The other options relate to different economic concepts. For example, an increase in unemployment rates is tied to labor market conditions but does not specifically address changes in prices of goods and services. Similarly, the reduction in national economic output refers to a decline in the overall production of goods and services in an economy, commonly associated with recessions, rather than rising prices. Fluctuation of stock market prices pertains to changes in the value of stocks and investments, which can be influenced by various factors but does not inherently describe inflation. Thus, the definition that captures the essence of inflation is the general rise in prices of goods and services.