If the Inflation Rate Falls from 4% in 2005 to 2

question 33

Multiple Choice

If the inflation rate falls from 4% in 2005 to 2% in 2006, then:

• A) disinflation has occurred.
• B) deflation has occurred.
• C) the average price level has declined.
• D) the value of money has increased.

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Definitions:

Increase In Income

A rise in the amount of money earned or received by an individual or within an economy over a specific period.

Horizontal Axis

In a graph or chart, the x-axis, which typically represents the independent variable or time period.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at specific prices.

Price Of Tacos

The amount consumers must pay to purchase tacos, which can vary based on ingredients, location, and other factors.