If you didn't get a cost of living increase in your paycheck this year:
A)you have still increased your purchasing power if deflation occurs.
B)your pay has gone down in real terms if deflation occurs.
C)your pay must have been adjusted for inflation.
D)inflation must have been zero.

Question

Quizplus · Accepted Answer

If deflation occurs, the general level of prices is decreasing, which means the purchasing power of money increases. Therefore, even without a nominal increase in your paycheck, you can buy more with the same amount of money, effectively increasing your purchasing power.

If You Didn't Get a Cost of Living Increase in Your