Question

In 2008, the rate of inflation was 2%, which then rose to 3% in 2009 before falling back to 2% in 2010. Between 2008 and 2009, the economy experienced _____ and between 2009 and 2010, the economy experienced _____. a) inflation; disinflation b) inflation, deflation c) disinflation; inflation d) disinflation; deflation

Answer 1

Answer:

The answer is: B) inflation, deflation

Explanation:

Inflation happens when the general prices of products and services in an economy increase.

Deflation is just the opposite, it occurs when the general prices of products and services in an economy decrease.

When we refer to inflation, we are not talking about the prices in an specific store or even a state, we have to consider the economy as a whole.