Deflation is a(n):
A) decrease in the purchasing power of a unit of money.
B) appreciation of the nation's currency.
C) decrease in the average level of prices.
D) increase in the average level of prices.

Question

Quizplus · Accepted Answer

Deflation refers to a decrease in the average level of prices, which in turn can lead to an increase in the purchasing power of a unit of money. Option A is incorrect as it describes the opposite of deflation. Option B describes an appreciation of the nation's currency, which can occur independently of deflation. Option D is also incorrect as it describes inflation, not deflation.

Deflation Is A(n)