General price level
Definition. The general price level is the average of the prices of all goods and services in an economy at a given point in time, usually measured by a price index such as the consumer price index. Changes in this average over time indicate inflation when it rises and deflation when it falls.
In the aggregate demand and aggregate supply model, the general price level is determined where aggregate demand equals aggregate supply for the economy as a whole.
This term belongs to Aggregate Demand and Aggregate Supply in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
Want to use general price level for marks in the exam? Learn it in class or message the team.