A decrease in consumption growth will cause inflation to fall in:
A) the short run only.
B) the long run only.
C) both the short run and the long run.
D) neither the short run nor the long run.

Question

Quizplus · Accepted Answer

In the short run, a decrease in consumption growth can lead to lower demand for goods and services, which can reduce inflationary pressures as prices adjust to the decreased demand.

A Decrease in Consumption Growth Will Cause Inflation to Fall