What Is the Difference Between Deflation and Disinflation

question 122

Multiple Choice

What is the difference between deflation and disinflation?

• A) Deflation is used in microeconomics, whereas disinflation is used in macroeconomics.
• B) Deflation refers to changes in expected inflation, while disinflation refers to changes in the actual rate of inflation.
• C) Deflation refers to a decrease in the overall price level, or negative inflation, while disinflation simply refers to a decrease in the inflation rate.
• D) There is no difference between these two concepts; they are synonyms.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operating costs, from its total revenue.

Statement Of Cash Flows

A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company, showing how the company's operations, investing, and financing activities affect cash.

Investing Activity

Transactions involving the purchase or sale of long-term assets and investments, a section in the cash flow statement.

Supplies

Items used in the operation of a business but not directly tied to the production of goods or services, such as office supplies.