Deflation occurs when the:
A) Price of large ticket items,such as appliances,decreases.
B) Price decreases for some goods and services outweigh price increases on all other goods and services.
C) Economy reaches full employment.
D) Average price of goods and services does not change.

Question

Quizplus · Accepted Answer

Deflation occurs when there is a general decrease in prices for goods and services, which may be caused by oversupply or reduced demand. It is not limited to just large ticket items and is a broader phenomenon that affects the economy as a whole. Option A is too narrow and only applies to specific items. Option C is incorrect as full employment is not necessarily related to deflation, and option D is not correct as deflation implies a decrease in average prices.

Deflation Occurs When The