Which economic term describes a sustained decrease in the general price level?

Which economic term describes a sustained decrease in the general price level?

• A. Deflation
• B. Inflation
• C. Philanthropy
• D. Great Plains

Answer: (A)

When prices across the economy fall over time, that is deflation. It means the general price level for goods and services declines sustainedly, not just a single item's price. Money then has more purchasing power because each unit buys more than before. This is the opposite of inflation, where prices rise. The other terms don’t describe price movements: philanthropy is charitable giving, and the Great Plains is a geographic region. So the concept described by the prompt is deflation.

When prices across the economy fall over time, that is deflation. It means the general price level for goods and services declines sustainedly, not just a single item's price. Money then has more purchasing power because each unit buys more than before. This is the opposite of inflation, where prices rise. The other terms don’t describe price movements: philanthropy is charitable giving, and the Great Plains is a geographic region. So the concept described by the prompt is deflation.