Final answer:
Deflation refers to a decrease in the general price level of goods and services over a longer period of time, representing a sustained trend rather than short-term fluctuations.
Step-by-step explanation:
Deflation is often defined as a decrease in the general price level of goods and services. This phenomenon implies that over time, the purchasing power of a currency increases as the same amount of money can buy more goods and services than before. There are two important aspects to consider when discussing deflation: the time frame and the generality of price movement.
Deflation over a shorter time period could be an anomaly or due to seasonal adjustments and not reflective of a broader economic trend. Conversely, deflation over a longer period of time is indicative of sustained price level decreases and has larger implications for the economy, potentially signaling economic distress.
Reflecting on the given options, the correct answer to the student's question is: 'Deflation is a decrease in the general price level of goods and services over a longer period of time.' This characterizes deflation as a persistent trend rather than a short-term fluctuation.