Q. Which one of the following statements is an appropriate description of deflation? (UPSC Prelims 2010)
Answer: It is a persistent fall in the general price level of goods and services
Notes: Deflation is defined as a sustained decrease in the general price level of goods and services in an economy, often leading to reduced consumer spending and economic contraction. This contrasts with devaluation (option 1, currency drop), recession (option 2, broader downturn), and disinflation (option 4, slowing inflation rate). Persistent fall in prices distinguishes it from one-off drops, negatively impacting purchasing power.