Question

Do you agree or not and explain why in each of the three cases:

A. If the CPI goes down from 240 to 235, then there is disinflation in the economy.  

B. Prices of some goods may fall and other goods prices will rise.

C. Price for all goods and service increase at the same rate and in all locations in the US.

Answer 1

A

No I do not agree on this statement because as the cpi goes down its one of the reason is DEFLATION NOT DISINFLATION in the economy

Deflation is a decrease in general price levels throughout an economy, while disinflation is what happens when price inflation slows down temporarily.

Disinflation, on the other hand, shows the rate of change of inflation over time. The inflation rate is declining over time, but it remains positive

B

Yes I agree with this because there would be rise in some goods prices and while on the other hand there would be decline in the in price of some goods all will depend on the demand and supply on a particular type of product its demand can be more so the price would rise

C

. Price for all goods and service increase at the same rate and in all locations in the US.

I disagree with this statement as there cant be increase in all the location of us as a same rate the rate would be differnt depending upon the circumstance in that particular area ita aggreagate demand and supply and many other factors