When There Is Deflation

question 74

Multiple Choice

When there is deflation:

• A) the central bank cannot push the real interest rate to zero.
• B) it has no effect on the output gap.
• C) it has no effect on the unemployment rate.
• D) there is a decline in real money.
• E) nominal interest rates are negative.

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Definitions:

Social Norms

Implicit or explicit rules that a group has for the acceptable behaviors, values, and beliefs of its members.

Formal Education

The structured educational system comprising schools, colleges, and universities where learning is facilitated by trained teachers.

Socialization

How children learn to become mature members of society; also known as acculturation.

Generations Defined

A categorization of people into cohorts based on their age group and shared cultural, social, or economic experiences.