Which of the following situations generally exists when deflation occurs?

Question

Quizplus · Accepted Answer

Deflation occurs when the overall price level of goods and services decreases. This is opposite to inflation, where the price level increases. Inflation and unemployment are not necessarily related to deflation, so options A and B can be eliminated. Option D describes a fall in the rate of inflation, not necessarily deflation. Option E is unrelated to deflation.

Which of the Following Situations Generally Exists When Deflation Occurs