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:

Global Convergence

The spread of common preferences across national borders.

Infrastructure

Infrastructure refers to the fundamental physical and organizational structures and facilities required for the operation of a society or enterprise, such as roads, water supply, and power grids.

Silicon

A chemical element, often used as a semiconductor in electronics and solar cells, as well as in the production of silicone rubbers and lubricants.

Globalization Of Production

The sourcing of land, labor, and capital from different nations rather than obtaining everything locally.