What is the difference between inflation and deflation?

Inflation is a general rise in prices, which reduces the purchasing power—or value—of money. It can be driven by rising demand for goods and services. Deflation is a general fall in prices, which increases money’s purchasing power, and it can result from falling demand. Therefore, the correct choice is “Inflation can result from rising demand and reduces the value of money. Deflation can result from falling demand and boosts the value of money.”

AI-written and checked against the verified answer.