Choose the Statement That Is Incorrect

Multiple Choice

Choose the statement that is incorrect.

A) In a deflation, the inflation rate is positive but decreasing in consequent years.
B) In a deflation, the price level persistently falls.
C) A one-time fall in the price level occurs when there is an increase in capital that increases potential GDP.
D) A one-time fall in the price level occurs either because aggregate demand decreases or because short-run aggregate supply increases.
E) A one-time fall in the price level is not a deflation.