Which of the following is not a part of deflation? a) depressed business b) reduced production c) higher prices d) unemployment

Deflation is a situation in an economy where the general price level of goods and services is decreasing. It leads to an increase in the purchasing power of currency, and it is the opposite of inflation. Deflation has several impacts on the economy, such as reduced production, depressed business, and unemployment.

We will now go through each provided option and analyze whether it is a part of deflation or not. a) Depressed business: This is a part of deflation, as lower prices reduce the profits companies can make, leading to a depressed business environment. b) Reduced production: This is also a part of deflation. As prices decrease, firms might cut back on production due to reduced profitability and decreased demand for goods and services. c) Higher prices: This is the opposite of deflation. Inflation is the situation where the general price level of goods and services increases, while deflation is characterized by a decrease in prices. Therefore, higher prices are not a part of deflation. d) Unemployment: This is a part of deflation, as reduced production and depressed business can lead to job cuts and increased unemployment rates.

After analyzing the four options, option c) higher prices is the only option that is not a part of deflation, as it represents an increase in the prices of goods and services, which is a characteristic of inflation, not deflation.