Question31 Generally speaking, the rate of inflation ________ during a recession. falls, then rises None of these answers is correct. stays the same rises falls ResetMaximum marks: 1 Flag question undefined

Question

BlackTom AI · Accepted Answer

When evaluating how inflation behaves during a recession, we should recall the typical demand-side dynamics that drive price levels. 
Option 1: 'falls, then rises' suggests inflation first decreases and later increases during the same recession. While some episodes may show a temporary dip followed by a rebound, the general pattern in many recessions is a broad weakening of inflationary pressures rather than a precise 'fall then rise' sequence, making this option less representative of the typical rate. 
Option 2: 'None of these answers is correct.' If there is a generally accepted pattern described among standard macroeconomics texts, this statement would be incorrect because there is at least one common behavior described. 
Option 3: 'stays the same' asserts no change in the inflation rate during a recession. In practice, demand destruction and slack in the economy tend to push inflation down, so remaining exactly constant is unlikely, rendering this option implausible. 
Option 4: 'rises' claims inflation increases during a recession. This contradicts the core mechanism of recessions, where weakened demand typically reduces price increases or even leads to slower or negative inflation (disinflation or deflation scenarios), so this is not the usual outcome. 
Option 5: 'falls' states that inflation tends to decrease during a recession. This aligns with the standard macroeconomic intuition: weaker demand eases upward pressure on prices, making inflation more likely to fall than to rise during economic downturn. This option coherently matches the common pattern observed in many recession periods.

Question31 Generally speaking, the rate of inflation ________ during a recession. falls, then rises None of these answers is correct. stays the same rises falls ResetMaximum marks: 1 Flag question undefined

View Explanation

Log in for full answers

Similar Questions

Mild inflation of 2 or 3 percent is said to be good for the economy.

In the long run, countries with higher rates of money growth usually have:

When inflation occurs

Inflation is a rise in

Question33 Generally speaking, the rate of inflation ________ during a recession. falls, then rises None of these answers is correct. falls rises stays the same ResetMaximum marks: 1 Flag question undefined

According to the article “As the Global Economy Picks Up, Inflation Is Oddly Quiescent Links to an external site. ,” why were economists expecting inflation to pick up in 2017?

Unanticipated inflation:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler