A reduction in the rate of inflation is referred to as A) ...

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A reduction in the rate of inflation is referred to as
 
  A) disinflation. B) deflation. C) recession. D) unemployment.

Question 2

In Pioneer Ville, the price elasticity of demand for bus rides is 0.5 . When the price of a bus ticket rises by 5 percent, _______.
 
  A. the demand for bus rides increases by 10 percent
  B. the quantity of bus rides demanded increases by 2.5 percent
  C. the demand for bus rides decreases by 2.5 percent
  D. the quantity of bus rides demanded decreases by 2.5 percent

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Answer to Question 1

A

Answer to Question 2

D The quantity of bus rides demanded decreases by (0.5)  (5 percent), which is 2.5 percent.

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Excellent

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