Deflation generally occurs when which of the following occurs?
A) Real GDP does not change.
B) The consumer price index decreases.
C) Nominal GDP does not change.
D) The consumer price index is greater than the GDP deflator.
E) The rate of inflation falls, for example, from 4% to 3%.

Question

Quizplus · Accepted Answer

Deflation occurs when the consumer price index decreases, meaning that the overall price level of goods and services has decreased. This can lead to a reduction in consumer spending, lower profits for businesses, and potentially a decrease in economic growth.

Deflation Generally Occurs When Which of the Following Occurs