Question 1
Deflation occurs when
◦ the average price level declines.
◦ economic activity declines.
◦ the economic growth rate declines.
◦ the unemployment rate declines.
Question 2
A period of very rapid increase in the overall price level is known as
◦ stagnation.
◦ hyperinflation.
◦ stagflation.
◦ depression.