Which of the Following Is a Major Problem with Deflation

question 163

Multiple Choice

Which of the following is a major problem with deflation?

• A)Money loses value so rapidly that economic agents will be reluctant to hold money.
• B)Economic agents tend put off purchases in anticipation of lower prices for goods and services, leading to a downward spiral in economic activity.
• C)Low prices for goods and services tend to result in massive shortages in most markets.
• D)Money supply cannot keep pace with consumption spending.

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Definitions:

Truthful

The quality or state of being accurate, honest, and in accordance with facts or reality.

Consumer Product Safety Commission

An agency of the U.S. government tasked with regulating the sale and manufacture of consumer products to ensure they do not pose any unreasonable risk of injury or death to consumers.

Food And Drug Administration

A U.S. Department of Health and Human Services federal agency tasked with ensuring public health protection and promotion by overseeing and managing the safety of food, tobacco products, dietary supplements, prescription and non-prescription drugs, vaccines, biopharmaceuticals, medical devices, and animal health products.

Debt Verification

The process of validating the accuracy and legality of a claimed debt, often initiated by the debtor seeking proof from the creditor.