Business
Business, 13.12.2019 23:31, shadowsnake

Your senators claim that lowering prices would be good for everyone—"who doesn’t like lower prices, after all? " they tell you they plan to lobby for deflation. falling prices could lead to a bad situation because:

a. people will expect prices to start rising and will want to spend more before they do.
b. deflation decreases the value of savings in real terms.
c. they make debt harder to pay back because the real interest rate will be rising, leading to less borrowing and less spending.
d. deflation increases consumption because people like falling prices.

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Answers: 3

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Your senators claim that lowering prices would be good for everyone—"who doesn’t like lower prices,...

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