MCQ Practice Single Best Answer Topic: Pakistan Economy

Q What do you understand by the term "deflation"?

Question ID

#19395

Subchapter

Pakistan Economy

Action

Choose one option below

Choose Your Answer

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A Excess circulation of money, causing dearness of goods ✔ ✖
B Increase in interest rates diverts money into savings and reduce circulation of money causing prices to fall. ✔ ✖
C Devaluation of local currency to the larger extend. ✔ ✖
D Decline in remittances from abroad, causing economic hardships for the Government ✔ ✖

Correct Answer: B

Increase in interest rates diverts money into savings and reduce circulation of money causing prices to fall.