PRC-3 · Chapter 18 · Question 32 of 33
If the general price level of an entire economy falls consecutively for a year, meaning money actually gains purchasing power, the economy is experiencing:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Deflation
Explanation
Deflation is a sustained decrease in the general price level of goods and services. Disinflation is merely a slowing down of the inflation rate.
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