Which event indicates that deflation is occurring? 1. A savings account can suddenly buy much more than before; 2. The length of time to pay off a home loan decreases by five years
Option 1. A savings account can suddenly buy much more than before indicates that deflation is occurring. In a deflationary period, the general price level of goods and services decreases, leading to increased purchasing power of money and a savings account being able to buy more.
Option 2. The length of time to pay off a home loan decreasing by five years does not necessarily indicate deflation. It could be a result of various factors such as changes in interest rates, increased income, or changes in loan terms.