Q7 · Practice questionSimple familiar1 mark
QUESTION 7
Annual inflation falls from 5% to 2%, and the CPI continues to rise. This is
(A)
deflation.
(B)
disinflation.
(C)
a fall in all individual prices.
(D)
a 3% fall in the price level.
WORKED SOLUTION
1 markAnswer B
Answer
B
Working
Disinflation is a lower positive rate of inflation. Prices still rise, but more slowly. Deflation requires a fall in the general price level.
Marking criteria
- Select B. [1 mark]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
View the QCAA syllabus