When does 'deflation' occur?
A)When there is a sustained decline in the price level.
B)When there is a one-time increase in the price level.
C)When there is a sustained increase in the price level.
D)When there is a one-time decrease in the price level.

Question

Quizplus · Accepted Answer

Deflation occurs when there is a sustained decline in the price level, meaning that prices are consistently decreasing over a period of time. It is the opposite of inflation, which is a sustained increase in the price level. A one-time increase or decrease in the price level would not result in deflation or inflation, respectively.

When Does 'Deflation' Occur