Deflation Occurs When

question 29

Multiple Choice

Deflation occurs when

• A)the growth rate of potential GDP slows.
• B)aggregate demand increases at a persistently faster rate than aggregate supply.
• C)aggregate demand increases at a persistently slower rate than aggregate supply.
• D)the quantity of money remains constant.
• E)the quantity theory of money is disregarded.

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Definitions:

S&P500 Value

Refers to the total market value of all stocks listed in the Standard & Poor's 500 Index, a commonly used representation of the U.S. equity market.

Futures Position

A commitment to buy or sell a specified amount of a commodity or financial instrument at a predetermined price at a specified time in the future.

FTSE 100 Futures

Financial contracts to buy or sell the FTSE 100 stock index at a predetermined future date and price, used for hedging or speculation on the direction of the UK stock market.

British Pound

The currency of the United Kingdom, commonly used within its borders and globally in financial transactions.