The Net Result of Deflation Is To

question 5

Multiple Choice

The net result of deflation is to:

• A) decrease consumption and investment, decreasing aggregate demand.
• B) decrease consumption and increase investment, decreasing aggregate demand overall.
• C) increase consumption and investment, increasing aggregate demand.
• D) increase consumption and decrease investment, increasing aggregate demand overall.

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Definitions:

Inequitable

Unfair or not just; an imbalance in the way people or groups are treated.

Equal Distribution

The sharing of resources, wealth, or opportunities among all members of a society or group in a way that is considered fair and equitable.

Lorenz Curve

A graphical representation of income or wealth distribution within an economy, indicating inequality.

45-degree Line

describes a line usually used in economics and other disciplines, where every point on it has equal x and y coordinates, often used as a benchmark in Keynesian cross diagrams.