A reduction in the rate of inflation is called:
A) deflation.
B) disinflation.
C) stagflation.
D) devaluation.

Question

Quizplus · Accepted Answer

Deflation refers to a decrease in the general price level of goods and services, often accompanied by a contraction in the overall economy. Disinflation, on the other hand, refers to a reduction in the rate of inflation, meaning that the overall level of prices is still increasing, but at a slower pace than before. Stagflation refers to a situation of high inflation and stagnant economic growth, while devaluation refers to a deliberate decrease in the value of a currency. Therefore, the correct choice is B, disinflation.

A Reduction in the Rate of Inflation Is Called