In a Period of Deflation,when There Is a Declining Price

question 78

Multiple Choice

In a period of deflation,when there is a declining price level,low nominal interest rates do not necessarily indicate that the cost of borrowing is ________ or that monetary policy is ________.

• A)low; tight
• B)low; easy
• C)high; tight
• D)high; easy

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Definitions:

Common Resources

Natural or man-made resources that are not owned by anyone, are available for use by more than one person, and can be depleted.

Public Good

A product that one individual can consume without reducing its availability to another individual and from which no one is excluded.

Lighthouse

A tall structure with a powerful light at the top, located near or on the shore, providing navigation guidance to maritime pilots at sea or on inland waterways.

Willingness To Pay

The maximum amount that a buyer will pay for a good.