Final answer:
Deflation is a decrease in the general price level of goods and services. While statement 1 is not false, statements 3 and 4 are incorrect. Deflation can lead to a decrease in consumer spending and can increase the real value of debt.
Step-by-step explanation:
Deflation is a decrease in the general price level of goods and services. This statement is not false, as deflation does result in a decrease in prices.
However, statement number 3 is false. Deflation is not always beneficial for the economy. While falling prices may seem like a positive thing for consumers, it can lead to a decrease in consumer spending, as people may delay purchases in anticipation of even lower prices in the future.
Furthermore, statement number 4 is also false. Deflation can increase the real value of debt, making it harder for borrowers to repay their loans. As the value of money increases, borrowers may find it more difficult to generate enough income to cover their debt obligations.