Suppose an economy had an inflation rate of 7 percent last year. This has decreased to 6 percent this year. This means that the economy is:
a. suffering from hyperinflation.
b. experiencing deflation.
c. experiencing disinflation

A market consequence of the establishment of a price floor program is that price will be:

a. too low, and an excess supply will result. b. too low, and a shortage will result. c. too high, and an excess supply will result. d. too high, and a shortage will result. e. below the market equilibrium price.

Which of the following central bank policies will lower the money supply?

a. Buying government securities. b. Lowering the discount rate. c. Selling foreign currency in the foreign exchange market. d. Lowering the reserve ratio. e. None of the above.