What does the inflation rate measure, and what is deflation?
What will be an ideal response?
The inflation rate measures the percentage increase in the price level from one year to the next. Deflation is a sustained decrease in the price level.
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One undesirable effect of social regulation is that it
A) affects smaller firms disproportionately, creating anticompetitive effects. B) destroys incentives for firms to engage in marginal cost pricing. C) raises prices of goods to consumers, while lowering prices to business and special interest groups. D) reduces the effectiveness of economic regulation.
During the past quarter of a century, the world's extreme poverty rate (per capita income of less than $1.25 per day) has
A) declined substantially. B) increased in economically free economies, but fallen in countries with more central planning. C) been virtually unchanged. D) increased substantially.