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Question
The phenomena of continuous price falling is called _________.
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Solution
The correct option is A deflation
Deflation
refers to an economic situation where the general price level in the economy
constantly falls for all the relevant goods and services over a considerable
period of time as a result of some changes in the production of the real output
of such goods and services. Deflation leads to increase in the value of money as with the same
real income, the commodities in the economy become relatively cheaper and public are able to
buy more goods and services in the economy.
Deflation refers to an economic situation where the general price level in the economy constantly falls for all the relevant goods and services over a considerable period of time as a result of some changes in the production of the real output of such goods and services. Deflation leads to increase in the value of money as with the same real income, the commodities in the economy become relatively cheaper and public are able to buy more goods and services in the economy.
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