Deflation severity by negative inflation rate

Steps:

• Define deflation as a negative annual change in inflation (price levels falling).
• Examine each option's annual change in inflation to identify negative values.
• Compare magnitudes: more negative indicates worse deflation.
• Select the option with the most negative rate (-5%).

Why A is correct:

• Deflation is measured by the inflation rate; -5% is the most negative, per economic definition of deflation as falling prices.

Why the others are wrong:

• B: -2% shows milder deflation than A's -5%.
• C: +2% indicates inflation, not deflation.
• D: +12% reflects high inflation, opposite of deflation.

Final answer: A