Which of the following situations generally exists when deflation occurs?

Question

Quizplus · Accepted Answer

Deflation generally occurs when the price level is decreasing, which means that prices of goods and services are falling. Inflation and unemployment are not necessarily linked to deflation. The rate of inflation falling from 10% to 3% would still indicate that there is inflation, not deflation. The statement about natural rate of unemployment is not related to deflation.

Which of the Following Situations Generally Exists When Deflation Occurs