In 2025 the CPI rose 10 percent; in 2026 it rose 6 percent; and in 2027 it rose 2 percent. We could describe 2027 as a year of _____. a) inflation b) disinflation c) deflation

We are given the following CPI growth percentages: - In 2025: 10% - In 2026: 6% - In 2027: 2% We can see that the CPI growth rate is positive in all three years, which means that there is an overall increase in the average price of goods and services. However, the rate at which prices are increasing is decreasing over time (10% to 6% to 2%).

Based on our analysis in Step 1, we can now compare the changes in the CPI growth rate with the definitions of inflation, disinflation, and deflation. Since the CPI growth rate is positive in 2027, it indicates that there is an overall increase in the average price of goods and services in that year. This means that 2027 cannot be described as a year of deflation because deflation refers to a decrease in the average price of goods and services. Now let's consider the change in the CPI growth rate from 2026 to 2027. The CPI growth rate decreased from 6% in 2026 to 2% in 2027, which means the rate at which prices are increasing has slowed down. Based on the definition of disinflation, this decrease in the rate of inflation (while still remaining positive) aligns with the concept of disinflation.

Based on our analysis and comparison in Steps 1 and 2, the most accurate description for 2027 is: b) disinflation