Multiple choice

The cause of deflation is

  1. lack of goods and services as compared to money supply

  2. lack of imports as compared to exports

  3. lack of money supply as compared to supply of goods and services

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Deflation occurs when the general price level of goods and services falls, typically caused by a reduction in the money supply or credit relative to the supply of goods.

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