Statement that is true about difference between inflation and deflation is D: Inflation can result from rising demand and reduces the value of money. Deflation can result from falling demand and boosts the value of money.
- Inflation serves as an increase in prices of goods as well as services in an economy generally, Deflation which is a decline in prices for goods as well as services.
- However, the difference between them is that inflation brings down the value of money and this results from increase in demand while deflation bring about increase in value of money.
Therefore, option D is correct.
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