Deflation refers to a situation where
A)the price level falls; it could be caused by a shift of AD to the left.
B)the price level falls; it could be caused by a decrease in aggregate supply.
C)the rate of inflation falls; it could be caused by a shift of AS to the right.
D)the rate of inflation rises; it could be caused by a decrease in aggregate demand.

Question

Quizplus · Accepted Answer

Deflation is characterized by a decrease in the general price level of goods and services, often due to a leftward shift in aggregate demand (AD).

Deflation Refers to a Situation Where