Which of the Following Is a Problem with Deflation

question 64

Multiple Choice

Which of the following is a problem with deflation?

• A) It raises the real cost of debt repayment.
• B) Stopping it will cause a recession.
• C) It causes people to pay more taxes.
• D) There is no problem with deflation;falling prices are good for the economy.

---

Definitions:

Ending Direct Materials Units

The quantity of direct materials still on hand at the end of a production period.

Cash Budget

A financial plan that projects cash inflows and outflows over a specific period, helping businesses manage their liquidity.

Cash Deficiency

A situation where a business or individual has insufficient cash to cover expenses or liabilities.

Planning Process

A systematic approach to setting goals and objectives, developing strategies, and outlining tasks and schedules to accomplish the goals.