Deflation during a recession is of concern to economists because:
A. workers will demand wage increases to offset the effects of deflation.
B. it is generally followed by periods of hyperinflation.
C. the government is powerless to stop it.
D. falling prices lead consumers to delay purchases and further reduce spending.
Answer: D
You might also like to view...
The president of the ________________________ holds a permanent seat on the FOMC
A) United States B) Federal Reserve District Bank of New York C) Federal Reserve District Bank of San Francisco D) U.S. Senate banking committee E) none of the above
If an increase in income results in a decrease in the quantity demanded for a product, the product is ________, and the value of the income elasticity of demand is ________.
A. a normal good; positive B. a normal good, negative C. an inferior good; positive D. an inferior good; negative