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During the 2007 to 2009 recession, the U.S. inflation rate fell from 3.8 percent in 2008 to what value in 2009?
A1.6 percent
B3.0 percent
C5.4 percent
D-0.4 percent
Answer & Solution
Correct answer: D. -0.4 percent
1. Inflation rates for several recessions are cited as evidence that inflation typically declines during downturns.
2. For the deep 2007 to 2009 recession, it reports inflation falling from 3.8 percent in 2008.
3. By 2009, that figure had fallen all the way to negative 0.4 percent, meaning prices were actually falling.
4. The other values listed belong to the 1991 to 1992 and 2001 recessions instead.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 10 "The Aggregate Demand/Aggregate Supply Model", section 10.5 | How the AD/AS Model Incorporates Growth, Unemployment, and Inflation_
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