Inflation implies that the level of all prices 3 increase.
When we talk about inflation, we are referring to the general increase in prices of goods and services over time. This means that as inflation rises, the purchasing power of money decreases, and you need more money to buy the same amount of goods as before. In a healthy economy, some level of inflation is normal, but if it gets too high, it can lead to economic problems. Therefore, the correct answer is that inflation indicates prices are on the rise.