Which of the following statements is true regarding disinflation ?

Options

A. A scenario when inflation is mainly due inflation of only a few commodities and not of all commodities
B. An overall decrease in prices over a specific period
C. A decrease in the rate of inflation in a specific period.
D. A sudden sharp decrease in prices due to unexpected reasons..

Answer

C

Explanation

Disinflation is a decrease in the rate of the inflation. Disinflation occurs when the increase in the “consumer price level” slows down from the previous period when the price were rising. For example, if the annual inflation rate for the month of january is 5% and it is 4% in the month of February, the prices disinflated by 1% but are still increasing by a 4% annual rate.