Question

The percentage of decrease in the average price of the economy���s goods and services is known as the __________.

a. nonlabor force
b. deflation rate
c. unemployment rate
d. consumer price index

Answer 1

The correct answer is B. A decrease in the average prices is called deflation. Therefore the overall percentage going down would be deflation rate.

Answer 2

Answer: b. deflation rate

The percentage of decrease in the average price of the economy’s goods and services is known as the deflation rate.

Explanation:

Deflation rate is known to be a decline in the price of goods and services in an economy. Furthermore, deflation in an economy can be caused by two factors, which are: increase in aggregate supply and fall in aggregate demand. Hence, it can lead to recession which will also result in loss of jobs, fall in wages and investment and so on.