Question

Which of these would deter (slow down) inflation? a decrease in interest rates an increase in economic growth a decrease in the price of bonds an increase in consumer spending

Answer 1

an increase in consumer spending

Inflation is an economic process where aggregate demand exceeds aggregate supply, thus if an increase in consumer spending is on its way, this could help deter (slow down) inflation, as the aggregate demand decrease and become in balance with aggregate supply. Inflation is an important indicator of the stability and the economic power of a country.