Deflation is
A)a one-time fall in the price level.
B)a persistent and ongoing falling price level.
C)always accompanied by an increase in the natural unemployment rate.
D)always accompanied by a decrease in the natural unemployment rate.
E)unknown in the twenty-first century.

Question

Quizplus · Accepted Answer

Deflation refers to a persistent and ongoing falling price level. It is characterized by a decrease in the overall level of prices of goods and services in an economy over a period of time, which can lead to a decrease in aggregate demand, and ultimately to negative economic consequences such as recession and unemployment. Deflation is not a one-time event and is distinct from short-term price fluctuations in specific markets. It is not always accompanied by a change in the natural unemployment rate. Deflation can occur in the twenty-first century, and has happened in the past.

Deflation Is