Definition
- Relative price change
- A relative price change is a rise or fall in the price of some goods compared with others, such as dearer rail fares alongside cheaper laptops.
- Not to be confused with: Inflation
- Inflation is a general and ongoing rise in the level of prices across an entire economy, so that each pound buys less over time.
Test yourself
What is the difference between relative price change and inflation?
Inflation is most prices rising together, year after year; a relative price change is some prices moving against others.