Changes in relative prices may occur
A)Only in periods of stable prices.
B)Only in periods of inflation or deflation.
C)In periods of stable prices or in periods of inflation or deflation.
D)In none of the other choices.

Question

Quizplus · Accepted Answer

Relative prices refer to the prices between different goods and services. They can change in periods of inflation or deflation as the general price level of all goods and services increases or decreases. However, they can also change in periods of stable prices due to changes in supply and demand conditions for a specific good or service. Therefore, choice C is the best answer as it covers both scenarios.

Changes in Relative Prices May Occur