Question

If inflation falls from​ 11% to​ 5%, there is deflation.
A. True
B. False

Answer 1

False.

Step-by-step explanation:

False.

Deflation is the decline in prices. Meaning that there is a general decrease in prices of goods and services. In the example, inflation is diminishing. Prices increase at a lower rate, but, they increase.

Deflation benefits consumers because they can purchase more goods and services with the same nominal income.