Which of the following is NOT a deflation cause?

• A. (i) only
• B. (iii) only
• C. (i) and (ii) only
• D. (ii) and (iii) only

Answer: (A)

Deflation occurs when the overall price level falls due to forces that push prices downward, such as weak demand, excess supply, or monetary tightening. To find which statement is NOT a deflation cause, you look for the one that does not create downward pressure on prices, while the others do.

If the second and third statements describe forces that drive prices down (deflationary pressures) and the first does not, then the option that identifies only the first statement as not causing deflation is the best pick. The other options would imply that the non-deflation-causing statement includes or excludes the wrong items, which would not align with which statements actually push prices lower.