If the price level in 2016 is 140 and it falls to 133 in 2017,what has the economy experienced between 2016 and 2017?
A) 5% inflation
B) 7% inflation
C) 7% deflation
D) 5% deflation

Question

Quizplus · Accepted Answer

The economy has experienced a decrease in the overall price level, which is known as deflation. To calculate the percentage change, we use the formula: ((New Price - Old Price)/Old Price) x 100
Using this formula, we get: ((133-140)/140) x 100 = -5%.
Therefore, the correct answer is D) 5% deflation.

If the Price Level in 2016 Is 140 and It