Disinflation Refers to

question 66

Multiple Choice

Disinflation refers to

• A)a decrease in the price level.
• B)a rapid increase in the price level.
• C)a reduction in the rate of inflation.
• D)an increase in the rate of inflation.
• E)a one time drop in the rate of inflation.

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Definitions:

Perfect Complements

Goods that are consumed together in fixed proportions, where the value or utility of one good increases with the consumption of the other.

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

Substitution Effect

The alteration in purchasing habits stemming from a shift in the relative cost of products, causing individuals to replace one item with another.

Price Change

A variation in the cost of a good or service over time or in response to supply and demand dynamics.