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From 1929 to the Early 1930s, the Prices of Consumer

Question 15

Multiple Choice

From 1929 to the early 1930s, the prices of consumer goods actually decreased. Economists call this phenomenon deflation. The rate of deflation during this period was around 7% per year. Suppose this rate of deflation persisted over 20 years. What would be the cost after 20 years of an item that cost $500 initially?


A) $23.25
B) $61.66
C) $271.90
D) $117.12

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