Which of the Following Statements Is True

question 77

Multiple Choice

Which of the following statements is true ?

• A) Deflation is an increase in the general level of prices.
• B) The consumer price index (CPI) measures changes in the average prices of consumer goods and services.
• C) Disinflation is an increase in the rate of inflation.
• D) Real income is the actual number of dollars received over a period of time.
• E) The real interest rate equals the nominal rate of interest plus the inflation rate.

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Definitions:

Supply

The total amount of a good or service that producers are willing and able to sell at a given price over a specific time period.

Buyers and Sellers

Participants in a market who exchange money for goods or services, where buyers provide the money and sellers provide the goods or services.

Markets

Markets are arenas in which buyers and sellers come together to exchange goods, services, or financial instruments at determined prices.

Equilibrium

A situation in the market where demand matches supply, resulting in steady prices.