If the size of the economy has grown for the last three quarters, but prices overall have dropped, which of the following is true?
A) The economy is in a contraction phase and CPI is increasing.
B) The economy is in an expansion phase and GDP is decreasing.
C) The economy is in an expansion phase and CPI is decreasing.
D) The economy is in a contraction phase and CPI is decreasing.

Question

Quizplus · Accepted Answer

If the size of the economy has grown for the last three quarters, it means the economy is in an expansion phase. If prices overall have dropped, it means CPI (Consumer Price Index) is decreasing. Therefore, choice C is correct. Choices A, B, and D are all incorrect as they contradict the information given in the question.

If the Size of the Economy Has Grown for the Last