221. Describe what else can be used instead of money as a store of value

226. Explain what disinflation means.
Disinflation is a temporary slowing of the pace of price inflation and is used to describe instances when the inflation rate has reduced marginally over the short term. Unlike inflation and deflation, which refer to the direction of prices, disinflation refers to the rate of change in the rate of inflation. Disinflation is not considered problematic because prices do not actually drop, and disinflation does not usually signal the onset of a slowing economy. Deflation is represented as a negative growth rate, such as -1%, while disinflation is shown as a change in the inflation rate, say, from 3% one year to 2% the next. Disinflation is considered the opposite of reflation, which occurs when a government stimulates an economy by increasing the money supply. There are several things that can cause an economy to experience disinflation.
If a central bank decides to impose a tighter monetary policy and the government starts to sell off some of its securities, it could reduce the supply of money in the economy, causing a disinflationary effect.
227. Explain what hyperinflation means.
inflation is an increase in the overall average level of prices and not an increase in the price of
any specific product. An extreme form of inflation is known as hyperinflation. Hyperinflation is an extremely rapid rise in the general price level. There is no consensus on when a particular rate of inflation becomes "hyper." The boundary between inflation and deflation is price stability. Price stability occurs when the average level of prices is moving neither up nor down.

228. Explain what nominal income means.
Many societies strive to improve the well-being of their members by increasing incomes. The statement “Canadian household incomes have increased,” may give an immediate impression that these households are better off. However, this may not necessarily be the case if nominal income is considered because inflation may completely erode any nominal income gains.

Nominal income is income that is not adjusted for changes in purchasing power, the amount of goods or services that one can afford with the income, owing to inflation. Adjusting nominal income for inflation is important because inflation decreases the amount of goods or services that one can afford with a given amount of nominal income. To see how inflation can erode nominal income gains, suppose that nominal income rises by 50 percent this year over last year. An individual is, in fact, better (worse) off if prices rise by less (more) than 50 percent over the same period, since the amount of goods or services that person can afford with the higher nominal income is more (less). Since nominal income is not adjusted for changes in the cost of living due to inflation, it is not a fully satisfactory measure of well-being. Fortunately, nominal incomes (e.g., wages, pensions) can be successfully adjusted to avoid loss in purchasing power due to inflation, provided that inflation is correctly anticipated.