Which of the following best describes deflation?
A. A decrease in purchases of goods and services.
B. A decrease in the cost of goods and services.
C. An increase in purchases of goods and services.
D. An increase in the cost of goods and services.
Question & Answer
Which of the following best describes deflation?
1 Answer
Verified archiveThe correct answer is B. A decrease in the cost of goods and services.
Explanation: Deflation refers to a decrease in the general price level of goods and services in an economy over a period of time. This means that the purchasing power of money increases, as consumers can buy more with the same amount of money due to lower prices.