What is deflation? A drop in prices due to a decrease in the supply of money. A rise in prices due to an increase in the supply of money. A time of high unemployment and falling prices. The paper bills and coins that a country circulates as money.

The overall drop in the price level of products and commodities is referred to as deflation. Although a reduction in the supply of cash and credit is typically connected with deflation, prices can also decline as a result of greater productivity and technical advancements. So, the correct Option is A.

The other Options are incorrect as,

Option B is incorrect as, Inflation is a rise in prices caused by an increase in supplies.

Option C is incorrect as, Stagflation is defined as a period of poor economic development and increased unemployment economic stagnation—along with rising prices (i.e. inflation).

Option D is incorrect as, The physical money in an economy is currency, which consists of coins and paper notes in circulation--.

Thus, option A is correct for Deflation.

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