Deflation Is

question 104

Multiple Choice

Deflation is:

• A) a decrease in prices;that is,a negative inflation rate.
• B) a reduction in the rate of inflation.
• C) an increase in prices.
• D) an increase in the rate of inflation.

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Definitions:

External Costs

Costs resulting from an economic activity that affects third parties who did not choose to incur that cost.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Interest Rate

Rate at which one can borrow or lend money.

Decline

A decrease in quantity, quality, or strength over a period, often observed in economic indicators, stock prices, or physical capacities.