When there is deflation in the economy: a) the general price level becomes negative b) the...
When there is deflation in the economy:
|
a) the general price level becomes negative |
|
|
b) the general price level falls |
|
|
c) the general price level increases |
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|
d) the inflation rate falls |
Homework Answers
Answer
Option
b) the general price level falls
Deflation means a decrease in the price level over the period generally a year. A deflation shows negative inflation in the economy.
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When there is deflation in the economy:
a) the general price level becomes negative
b) the...
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Suppose an economy produces only smart phones. If the price level falls, the value of currency a) )rises, because one unit of currency buys more smart phones. This is called deflation. ) rises, because one unit of currency buys more smart phones. This is called inflation. ) falls, because one unit of currency buys fewer smart phones. This is called deflation. ) falls, because one unit of curreney buys fewer smart phones. This is called inflation
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