Which event indicates that deflation is occurring?

Question

(1 point)
O A savings account can suddenly buy much more than before.
O The profits of a clothing factory increase rapidly.
O The length of time it takes to pay off a home loan decreases by five years.
O A local store begins offering ice cream bars at two for $5.00 instead of three for $5.00.

Answer 1

The event that indicates deflation is occurring is:

O A savings account can suddenly buy much more than before.

Deflation refers to a decrease in the general price level of goods and services, leading to an increase in the purchasing power of money. If a savings account can buy more than before, it suggests that prices are falling, which is characteristic of deflation.