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Deflation Occurs in an Economy When There Is a Contraction

question 116

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Deflation occurs in an economy when there is a contraction in the money supply.


Definitions:

Scarce Means

The limited resources available to meet unlimited wants and needs in an economy, necessitating choices and priorities.

Production

The process of creating goods and services.

Human Wants

The desires and needs of individuals or society that drive demand for products, services, and resources.

Opportunity Cost

The forgone benefit that would have been derived by an option not chosen.

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