Which of the following results would be the clearest indication that an economy was experiencing deflation?
A)a decrease in the unemployment rate
B)a decrease in GDP
C)an increase in the PPI
D)a decrease in the CPI

Question

Quizplus · Accepted Answer

Deflation is a sustained decrease in the general price level of goods and services. A decrease in the consumer price index (CPI) would be the clearest indication of deflation, as it measures the change in prices of goods and services purchased by households. A decrease in the unemployment rate or GDP may indicate economic growth, while an increase in the producer price index (PPI) may reflect changes in production costs rather than consumer prices.

Which of the Following Results Would Be the Clearest Indication