Which of the following statements is true?
A) Deflation means that the general level of prices is falling.
B) Deflation benefits everyone in society because it causes prices to drop.
C) Deflation affects prices of food and other consumer products, but does not affect households' incomes.
D) All of the statements are true.

Question

Quizplus · Accepted Answer

Deflation is characterized by a decrease in the general price level of goods and services, which means that the purchasing power of money increases. However, it does not benefit everyone in society, as it can lead to reduced consumer spending, lower production, layoffs, and decreased household incomes, contradicting statements B and C.

Which of the Following Statements Is True