Which of the following is true of disinflation?
A)It is a reduction in the inflation rate from year to year.
B)It is used to describe instances when the inflation rate is negative.
C)It refers to misinformation about the real and nominal rates of inflation.
D)It refers to miscalculations about the inflation rates.

Question

Quizplus · Accepted Answer

Disinflation refers to a reduction in the inflation rate from one year to the next, while still maintaining a positive inflation rate. This means that prices are still increasing but at a slower rate than before. Option B is incorrect because a negative inflation rate is called deflation, not disinflation. Option C and D are also incorrect because disinflation has nothing to do with misinformation or miscalculations.

Which of the Following Is True of Disinflation