If the Inflation Rate Is Negative, the Price Level in an Economy

question 145

Multiple Choice

If the inflation rate is negative, the price level in an economy is

• A) falling.
• B) rising slowly.
• C) constant.
• D) rising rapidly.

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Definitions:

Interest Rate

The percentage of a loan that is added on as interest for the borrower, usually stated as an annual rate.

Economic Value

A measure of the benefit provided by a good or service to an economic agent.

Payments

Transfers of money, or other agreed-upon medium, from one party to another in exchange for goods, services, or to fulfill a legal obligation.

Compounded Quarterly

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan on a quarterly basis.