Deflation is a:
A) decrease in unemployment.
B) decreasing aggregate price level.
C) decline in wages.
D) recession.

Question

Quizplus · Accepted Answer

Deflation refers to a decrease in aggregate price level, meaning that the general price level of goods and services is declining. This is the opposite of inflation, which is an increase in aggregate price level. Deflation can be caused by a decrease in demand or an increase in supply. It is not necessarily associated with a decrease in unemployment, decline in wages or recession, although deflation can have negative effects on the economy.

Deflation Is A