Asked by Jonas Hauser on Jun 20, 2024
Verified
An example of deflation since the base year would be a CPI in the current year of
A) 90.
B) 100.
C) 110.
D) 200.
Deflation
A decrease in the general price level of goods and services in an economy over a period.
CPI
The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
Base Year
A specific year against which economic growth, prices, or other economic indicators are measured and compared.
- Distinguish between demand-pull and cost-push inflation.
Verified Answer
SL
Sophie LafondJun 25, 2024
Final Answer :
A
Explanation :
Deflation is indicated by a Consumer Price Index (CPI) value less than 100 since the base year, meaning prices have generally fallen. A CPI of 90 suggests a decrease in the general price level compared to the base year.
Learning Objectives
- Distinguish between demand-pull and cost-push inflation.