Which of the following statements are correct in case of deflation 1 Deflation leads ...........

Economic Affairs Inflation

Which of the following statements are correct in case of deflation?

1. Deflation leads to adverse effect on employment and production.

2. Deflation decreases real value of money

3. It leads consumers to postpone spending, which in turn lead to further weakness in the economy.

Codes:

1 and 3

1 and 2

1 only

2 and 3

2nd statement is incorrect. Deflation increases real value of money.

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