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Year Inflation Rate over previous year 1991 2 1992 4 1993 3 1994 4 1996 -1...

Year Inflation Rate over previous year
1991 2
1992 4
1993 3
1994 4
1996 -1

During which year did this economy experience disinflation?

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Answer #1

Answer- The correct year is 1993. Disinflation refers to a fall in the inflation rate. Inflation is the rise in prices of goods and services and hence a person with each unit of the respective currency will now buy less or fewer number of goods or services. During the year 1993 the inflation rate decreased from 4 to 3 and hence there was a fall in the inflation rate. In the year 1992 and 1994 the inflation rose in each case. Also, in the year 1996 there was no inflation as that was the year of deflation. Deflation is a state where the prices of hoods and services fall because of excess supply in the market.

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