Which of the Following Is NOT a Consequence of Deflation

question 39

Multiple Choice

Which of the following is NOT a consequence of deflation?

• A) Deflation causes uncertainty about the future.
• B) The threat of deflation can make people reluctant to borrow for long periods.
• C) Deflation causes the real value of money to fall.
• D) Firms may be reluctant to undertake investments for fear that the prices at which they can sell their output will drop.

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Definitions:

Holder

An individual or entity that possesses a negotiable instrument, such as a check or promissory note, and has the right to enforce it.

Bearer

Pertaining to negotiable instruments, it refers to the individual possessing the document entitled to the rights therein.

Instrument

A legal document formally evidencing a right or obligation, such as contracts, wills, or promissory notes.

Good Faith

A principle that emphasizes honesty, fairness, and integrity in the fulfillment of contractual obligations or in negotiations.