Deflation

question 72

Multiple Choice

Deflation

• A) automatically implies that,on average,everyone is better off because prices have fallen.
• B) would negatively affect producers but positively affect consumers because producers must accept lower prices.
• C) might easily make both producers and consumers better off because consumers might lose jobs due to falling prices and profit margins,and the falling profit margins would negatively impact producers.
• D) might make you better off if your nominal wages fall more rapidly than prices.
• E) automatically occurs when there are more goods with falling prices than there are goods with increasing prices.

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Definitions:

Value

The importance, worth, or usefulness of something or a numerical quantity measured or assigned or computed.

Test Statistic

A statistic calculated from sample data, used to assess the plausibility of a hypothesis.

Sample Standard Deviation

The square root of the sample variance, measuring how spread out sample points are from the sample mean.

Observations

Refers to the individual data points or recorded measures of variables collected in a study.