Which of the Following Is a Difference Between Inflation and Deflation

Multiple Choice

Which of the following is a difference between inflation and deflation?

A) The Federal Reserve buys government securities when inflation is a concern, whereas the Federal Reserve sells government securities when deflation is a concern.
B) Inflation increases the unemployment rate, whereas deflation decreases the unemployment rate.
C) A high level of inflation is bad for the economy, whereas a high level of deflation signifies a healthy economy.
D) Inflation is a period of rising average prices across the economy, whereas deflation is a period of falling average prices across the economy.