Cashland's banking system recently crashed. This eventually led to companies being unable to borrow money to run their businesses and employees needed to be terminated. These circumstances cut into consumer's purchasing power, causing a severe decline in the prices of goods and services, better known as ________.
A) disinflation.
B) deflation.
C) contra inflation.
D) overproduction.

Question

Quizplus · Accepted Answer

Deflation means that prices are actually declining. Disinflation occurs when the rate of increase in prices is slowing down, i.e. the inflation rate is declining.

Cashland's Banking System Recently Crashed