During a certain four-year period, the consumer price index (CPI) increased by only 5%, but during the next four-years period, i

Question

4 years ago

14

During a certain four-year period, the consumer price index (CPI) increased by only 5%, but during the next four-years period, i

t decreased by 15%. Which of these following conditions must have existed during the second four year period?
A. Depression
B. Inflation
C. Deflation
D. Recession

Social Studies

2 answers:

masya89 [10] · Answer 1 · 2022-01-01T18:13:28+03:00

masya89 [10]4 years ago

5 0

I put deflation and its right

svetlana [45] · Answer 2 · 2022-01-01T20:03:04+03:00

The correct answer is C.

Deflation is the inverse of inflation. It is a process of progressive decline of the price level in a certain country over a period of time. The CPI is an index which measures the price level, as it is constituted by the market prices of a set of goods and services in a specific country. Therefore, in the period in which the CPI experienced a sustained decrease (of around 15%) it is by definition a period of deflation.

Inflation, on the contrary, is the proggresive and sustained increase in the price level in a certain country during a period of time.