Question

Which statement accurately describes disinflation? It must be accompanied by a decline in the price level. It is a gradual reduction in the price level over time. The inflation rate rises at a higher rate. It is a reduction of the inflation.

Answer 1

The answer is: There is a lot of money in circulation, which makes it worth less and creates pressure to raise prices.

Answer 2

Answer:

The correct answer is It is a reduction of the inflation.

Explanation:

Deflation is an economic stage in which price growth (inflation) is reduced but does not become zero or negative (deflation). It also applies to a public policy that seeks exactly this effect in the economy, either through fiscal policy measures (tax increase or other public collection, decrease in public expenditure) or monetary policy measures (restrictions on the money supply, increases in the interest rate) that in any case will be moderated, so as not to distort prices or force them to fall. It is a very common objective of economic policy, for example in Spain during the 80s and 90s or most of the countries of Eastern Europe since the fall of the Berlin Wall.