Disinflation Most Likely Occurs When

question 116

Multiple Choice

Disinflation most likely occurs when

• A)output grows at an increasing rate over time..
• B)output grows at a decreasing rate over time.
• C)output growth becomes negative.
• D)the overall price level declines over time.
• E)the overall price level is negative.

---

Definitions:

Cost of Capital

The required return necessary to make a capital budgeting project, such as building a new factory or investing in new equipment, worthwhile.

Equity Funds

Investment funds that primarily invest in stocks, aiming to provide investors with growth or income through dividends and capital gains.

Borrowed Funds

Money that an entity obtains from another party with the promise to return the principal amount along with interest.

Present Value

The present value of a sum of money or series of cash flows expected in the future, discounted at a certain rate of return.