Assume the Inflation Rate Falls from 4 Percent to 2

question 257

Multiple Choice

Assume the inflation rate falls from 4 percent to 2 percent. This means that

• A) the price level is increasing more slowly.
• B) the economy is experiencing deflation.
• C) the price level has fallen.
• D) real GDP is decreasing.

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Definitions:

Streak

A long, thin line or mark of a different substance or color from its surroundings.

Cleavage

A property of minerals that allows them to break along smooth, flat surfaces based on their crystal structure.

Cleavage

A property of minerals that describes how they break along certain planes where their atomic bonding is weaker, resulting in smooth, flat surfaces.

Liquid State

A phase of matter characterized by a definite volume but no definite shape, allowing it to flow and take the shape of its container.