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Question
Which of the following is an economic term?
Which of the following is an economic term?
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Solution
The correct option is C Deflation
Deflation is an economic term which means there is general decline in prices of goods and services occurring when the inflation rate falls below 0%.
Deflation happens naturally when the money supply of an economy is fixed. In times of deflation , the purchasing power of currency and wages are higher than they otherwise would have been . Hence when the overall price level decreases so that inflation becomes negative is called deflation
Deflation is an economic term which means there is general decline in prices of goods and services occurring when the inflation rate falls below 0%.
Deflation happens naturally when the money supply of an economy is fixed. In times of deflation , the purchasing power of currency and wages are higher than they otherwise would have been . Hence when the overall price level decreases so that inflation becomes negative is called deflation
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