Asked by Katherine Marshall on Apr 27, 2024
Verified
Disinflation is
A) the same as deflation.
B) a constant price level.
C) negative inflation.
D) a drop in the average level of prices.
E) a reduction in the annual rate of inflation.
Disinflation
A decrease in the rate of inflation, indicating a slowdown in the increase of prices over time.
Inflation Rate
The percentage increase in the general level of prices for goods and services in an economy over a period of time, typically measured annually.
Average Level
A mean or typical value obtained by dividing the total of all observed values of a variable by the number of observations.
- Distinguish between disinflation, deflation, and the conditions that contribute to each.
Verified Answer
SM
Siham MilitoApr 30, 2024
Final Answer :
E
Explanation :
Disinflation is a reduction in the annual rate of inflation, not a drop in the actual level of prices like deflation. It can be considered a slowing down of inflation, but not a constant price level as in B). Negative inflation, as in C), is deflation.
Learning Objectives
- Distinguish between disinflation, deflation, and the conditions that contribute to each.