What does deflation refer to?
A) decreasing relative prices
B) a decreasing price level
C) a slowing down of the rate of inflation
D) a slowing down of the rate of relative price decreases

Question

What does deflation refer to?  
A) decreasing relative prices 
B) a decreasing price level 
C) a slowing down of the rate of inflation 
D) a slowing down of the rate of relative price decreases

Quizplus · Accepted Answer

Deflation refers to a decreasing price level, which means that general prices of goods and services across the economy are decreasing instead of increasing. It is opposite of inflation, which refers to increasing price levels. The other options are not accurate descriptions of deflation.

What Does Deflation Refer To