Deflation Is a Problem Because It

question 91

Multiple Choice

Deflation is a problem because it:

• A) increases the value of debt, making it harder to pay it back.
• B) increases the time it takes for monetary policy to be effective.
• C) increases shoe-leather costs.
• D) reduces the effectiveness of fiscal policy in stimulating the economy.

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Definitions:

Military Regimes

Governments run by military forces, often established after a coup d'état, where civilian rule is suspended or limited.

Democratic Governments

Systems of government where power is vested in the people, who rule either directly or through freely elected representatives, characterized by free and fair elections, protection of human rights, and the rule of law.

Nixon-Khrushchev Debate

A series of impromptu exchanges between U.S. Vice President Richard Nixon and Soviet Premier Nikita Khrushchev in 1959, highlighting the tensions and ideological differences between the U.S. and the Soviet Union during the Cold War.

Economic Abundance

A state of having plentiful wealth and resources, where goods and services are available in excess, leading to a high standard of living.