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Which statement best explains Deflation?

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Question ID #26400 UPSC UPSC EPFO APFC 2026 Mock Test Series UPSC EPFO APFC Indian Economy Sectional Test 2026 Medium

Correct Answer: D. Sustained decline in the general price level
Deflation: Sustained decline in the general price level

Question: Which statement best explains Deflation?

A. Value of output minus intermediate consumption generated by producers

B. Central-bank policy influencing money, liquidity and interest rates to achieve macroeconomic objectives

C. Mechanism or rate historically used by RBI for absorbing liquidity from banks

D. Sustained decline in the general price level

Correct Answer: D. Sustained decline in the general price levelDeflation: Sustained decline in the general price level

Which statement best explains Deflation? - MCQ Explanation

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Correct answer: D. Sustained decline in the general price level