Question

Which of the following is a cause of disinflation?

A business cycle expansion.

A recession.

An increase in the growth rate of the money supply.

All of these answers.

What is unique about an annuity loan repayment structure?

"The borrower can draw down credit, repay and re-draw"

Interest is paid only on money actually withdrawn

Each installment is the same amount

The money is paid back in regular installments

Answer 1

ANSWER 1

CORRECT OPTION : Option (b) : A Recession

EXPLANATION :

• Disinflation is basically slow down in the ongoing rate of Inflation in the Market
• Inflation rate can be slowed down by decreasing growth rate of the money supply so that the purchasing power on consumers are controlled which will reduce their expenditures on thereby maintain demand-supply levels , by Business Cycle Contractions , and Recession which will again ultimately lead controlled money supply.

​​​​​​​ANSWER 2

CORRECT OPTION : Option (d) : the money is paid back in regular installments

EXPLANATION :

Annuities are basically regular stream of payments made at equal time levels .