Asked by Shayan Patel on Jun 06, 2024
Verified
Statement I: We had a period of deflation immediately following World War II.
Statement II: We have not had a period of sustained deflation since the early 1930s.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Sustained Deflation
A prolonged period in which the level of consumer prices decreases, indicating a reduction in the inflation rate below zero percent.
World War II
A global conflict that lasted from 1939 to 1945, involving many of the world's nations, including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis.
- Absorb the essence and contributing elements of inflation and deflation.
- Understand the relationships between inflation, deflation, and economic indicators such as the unemployment rate.
Verified Answer
KS
Kristin StoneJun 10, 2024
Final Answer :
B
Explanation :
Statement I is false - there was actually a period of inflation immediately following World War II due to pent-up demand and limited supply of goods.
Statement II is true - while there have been some brief episodes of deflation in certain sectors or regions, there has not been a sustained period of deflation for the whole economy since the 1930s.
Statement II is true - while there have been some brief episodes of deflation in certain sectors or regions, there has not been a sustained period of deflation for the whole economy since the 1930s.
Learning Objectives
- Absorb the essence and contributing elements of inflation and deflation.
- Understand the relationships between inflation, deflation, and economic indicators such as the unemployment rate.