Which statement is TRUE about inflation and deflation?

Question

Quizplus · Accepted Answer

Both inflation and deflation can pose problems for the economy. Inflation can lead to a decrease in purchasing power, making goods and services more expensive, and reducing the value of savings and investments. Deflation can lead to a decrease in consumer spending and business investment, as people and businesses wait for prices to fall further. Both can also negatively impact the labor market and create uncertainty for investors. Therefore, while moderate levels of inflation and deflation are generally considered normal and acceptable in the economy, high levels of either can be problematic.

Which Statement Is TRUE About Inflation and Deflation