When the overall price level of consumer goods goes up, we have _____; when they go down, we have _____.
A) deflation / inflation
B) price stability / inflation
C) inflation / deflation
D) price stability / depression

Question

Quizplus · Accepted Answer

Inflation is the increase in the price level of consumer goods, while deflation is the decrease in the price level of consumer goods. Choice A and B are incorrect because deflation refers to a decrease in the price level, while depression is a situation of prolonged and severe economic contraction. Therefore, choice C is the best answer.

When the Overall Price Level of Consumer Goods Goes Up