The rate at which the general level of prices for goods and services rises, eroding purchasing power. Federal open Market Committee (FOMC) Contractionary Monetary Policy Inflation Deflation

## Step 1<br />The problem is asking for the term that describes the rate at which the general level of prices for goods and services rises, eroding purchasing power. This is a description of the economic concept of inflation.<br /><br />## Step 2<br />Inflation is a general and ongoing rise in prices for goods and services in an economy over time. When inflation rises, the purchasing power of money decreases, meaning that you can buy less with the same amount of money.<br /><br />## Step 3<br />The other options provided, Federal Open Market Committee (FOMC) and Contractionary Monetary Policy, are related to the management of inflation. The FOMC is a part of the Federal Reserve System that is responsible for managing the country's money supply. Contractionary Monetary Policy is a tool used by the FOMC to combat inflation, which involves reducing the money supply to increase interest rates and reduce spending.<br /><br />## Step 4<br />Deflation is the opposite of inflation. It is a decrease in the general price level of goods and services, which means that the value of money increases.