The sustained decrease in the general price level is called as (a) deflation (b) stagflation (c) devaluation (d) recession

Deflation is defined as a sustained decrease in the general price level of goods and services throughout an economy [2]. It occurs when the inflation rate falls below zero percent, effectively increasing the purchasing power of money [1]. This phenomenon is distinct from disinflation, which refers to a slowing down in the rate of inflation while the rate remains positive [2]. While deflation might seem beneficial to consumers, it is often associated with negative economic indicators such as significant unemployment, weak demand, and recessionary periods [1]. In contrast, stagflation involves high inflation combined with stagnant growth, devaluation refers to a deliberate downward adjustment of a currency's value under a fixed exchange rate system, and recession is a period of negative economic growth [1]. Therefore, a sustained fall in general prices is specifically termed deflation [2].

Sources

1. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 4: Inflation > Deflation > p. 74
2. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > There are mainly two causes of inflation: > p. 113