Multiple choice

When prices are falling continuously, the phenomenon is called

  1. inflation

  2. stagflation

  3. deflation

  4. reflation

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Deflation is the sustained decrease in the general price level of goods and services. Inflation is rising prices, stagflation is inflation plus economic stagnation, and reflation is policies to reverse deflation. Falling prices characterize deflation.