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Which one of the following statements is an appropriate description of deflation

,

Which one of the following statements is an appropriate description of deflation ?

(a)

It is a sudden fall in the value of a currency against other currencies

(b)

It is a pertinent recession in both the financial and real sectors of the economy

(c)

It is a persistent fall in the general price levels of goods and services

(d)

It is a fall in the rate of inflation over a period of time

Answer:

(c)

Core Books/NCERT

Explanation

Deflation refers to a persistent and sustained decrease in the general price level of goods and services in an economy over a period of time. This means that prices of most goods and services fall over time, resulting in an increase in the purchasing power of money. It is the opposite of inflation, which refers to a persistent increase in the general price level of goods and services over time.