Over a three year period, prices in an economy increased by 5 percent, then 4 percent, and then 3 percent. This price movement is an example of:

Question

Quizplus · Accepted Answer

Disinflation refers to a slowdown in the rate of inflation, meaning that prices are still increasing but at a decreasing rate. In this scenario, the rate of price increase goes from 5% to 4% to 3%, indicating a slowdown in inflation, hence disinflation.

Over a Three Year Period, Prices in an Economy Increased