During a certain 8-year period, the consumer price index (cpi) increased by 70%, but during the next 8-year period, it increased by only 60%. Which of these conditions must have existed during the second 8-year period?

These are the answer choices for the question:

A. Inflation

B Stagnation

C. Conflation

D. Deflation

And this is the correct answer choice:

D. Deflation

Explanation:

Deflation occurs whe the consumer price index, instead of rising from year to year, falls.

In the second period, there was deflation when compared to the first period, because the consumer price index increased 10% less. This necessarily means that for a few segments of the second time period, prices fell instead of rising.