Deflation Is a Problem for All of the Following Reasons

question 34

Multiple Choice

Deflation is a problem for all of the following reasons except it:

• A)is often associated with large falls in asset prices.
• B)may prevent a central bank from lowering the real interest rate as much as it would like.
• C)can undermine a country's financial system.
• D)can lead to excessive increases in aggregate demand.

---

Definitions:

Motive

An inner drive or reason that causes a person to act in a certain way or pursue particular goals.

Life Position

A concept from transactional analysis that describes an individual's general attitude towards life and others, which can significantly influence their interactions and relationships.

Social Comparison

The process of evaluating oneself based on comparison with others, influential in shaping self-esteem and social identity.

Positive Face

represents a person's desire to be liked, admired, and respected in their social interactions.