Which of the Following Situations Generally Exists When Deflation Occurs

question 3

Multiple Choice

Which of the following situations generally exists when deflation occurs?

• A)inflation and unemployment are both increasing
• B)inflation and unemployment are both decreasing
• C)the price level is decreasing
• D)the rate of inflation is falling from,for example,10% to 3%
• E)the natural rate of unemployment is zero

---

Definitions:

Work In Process

Refers to the goods that are in the manufacturing process but are not yet complete; it's an inventory account on the balance sheet.

Bottling Department

The bottling department refers to a specialized division within a manufacturing or production facility that focuses on the filling, sealing, and packaging of liquid products.

Equivalent Units

A concept in costing used to allocate production costs between completed units and units still in process, by converting work in process into the number of completed unit equivalents.

First-In, First-Out

First-In, First-Out (FIFO) is an inventory valuation method where the earliest items purchased or produced are the first sold, affecting the cost of goods sold and inventory value.