Which of the Following Explains Why an Economy That Has

question 96

Multiple Choice

Which of the following explains why an economy that has moved away from long-run equilibrium due to a fall in aggregate demand should avoid deflation?

• A) Deflation causes a rightward shift in the short-run aggregate supply curve.
• B) Deflation is usually accompanied by an increase in employment.
• C) Encouraged by lower prices, households increase the demand for goods and services.
• D) Consumers often postpone consumption in the expectation that prices will fall further.

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Definitions:

Bank Notification

A notification sent by a bank to its customers regarding updates, transactions, policies, or any other important information.

Litigation

Litigation is the process of taking a dispute to a court of law to be resolved through a lawsuit, including all the proceedings involved from filing to trial.

Stop-Payment Order

An instruction given to a bank by an account holder not to pay a specific check or payment that has been issued but not yet processed.

UCC

The Uniform Commercial Code is an extensive collection of regulations that oversee business dealings within the United States.