wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Consider the following statements:
(1) Deflation is decrease in the general price level of goods and services.
(2) Deflation is the negative inflation rate which falls below 0%.
Which of the statements given above is/are correct?

A
Only 1
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
Only2
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
Both 1 and 2
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
D
Neither 1 nor 2
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is C Both 1 and 2
When inflation rate falls below 0%, the prices of goods and services drop below their general levels. Such a situation is known as deflation. This happens when the economic growth in a country stalls, and the growth in disposable income ceases. The population demands lesser good and services compared to the supply, which creates deflationary pressures.

flag
Suggest Corrections
thumbs-up
1
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Comparative Financial Statement
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program
CrossIcon