Which term refers to a general slowdown in the rate of inflation?
A. Disinflation
B. Deflation
C. Core inflation
D. Asset inflation
Answer (1)
The correct answer is letter A. DisinflationDisinflation means that inflation is still happening, but it’s slowing down. Prices are still going up, but they’re rising more slowly than before. It is different from deflation, which is when prices actually go down.Let’s say inflation in the Philippines was 8% last month, but this month it dropped to 6%. That’s disinflation—prices are still rising, but at a slower pace. This is a good sign for the economy because it shows that price increases are being controlled.The Bangko Sentral ng Pilipinas (BSP) uses tools like interest rate hikes to cause disinflation and bring inflation back to the target range of 2–4%. It shows the central bank’s policy is working to cool things down without crashing the economy.
