(Consider This) Which of the Following Statements Is Most Accurate

question 278

Multiple Choice

(Consider This) Which of the following statements is most accurate about economists’ concerns about deflation?

• A)Economists are not concerned about deflation because consumers benefit from the lower prices.
• B)Central banks will encourage deflation by keeping interest rates too low.
• C)Deflation can lead to bankruptcies that trigger a downward deflationary spiral.
• D)Deflation will make a nation’s exports less attractive to foreign buyers.

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Definitions:

Marginal Utility

The additional satisfaction or benefit gained from consuming one more unit of a good or service.

Indifference Curve

A graphical representation showing combinations of goods among which a consumer is indifferent, indicating the same level of utility or satisfaction.

Budget Line

The graphical depiction of the trade-off between two goods, demonstrating the combinations that a consumer can afford based on their income and the goods' prices.

Marginal Utility

The change in total satisfaction received from consuming one additional unit of a good or service.