Statement I: Disinflation occurs when the rate of inflation declines.
Statement II: Disinflation has occurred during recent recessions.

A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.

Disinflation

A decrease in the rate of inflation, indicating a slowdown in the rate at which prices for goods and services increase.

Rate of Inflation

The rise in the average cost of goods and services across an economy over a specific period.

Recessions

Periods of economic downturn when output and employment are falling, typically defined as two consecutive quarters of declining gross domestic product.