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QUESTION 1/10
Which of the following best describes deflation?
A. An increase in the cost of goods and services.
B. An increase in purchases of goods and services.
C. A decrease in the cost of goods and services.
D. A decrease in purchases of goods and services.



Answer :

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Final answer:

Deflation is the decrease in general price levels of goods and services, increasing the real value of money.


Explanation:

Deflation is a decrease in the general price levels of goods and services, occurring when the inflation rate falls below 0%. This leads to the real value of money increasing and allows individuals to purchase more goods with the same amount of money over time. In contrast to inflation where prices rise, deflation results in falling prices in an economy.


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