Which of the following statements is NOT true?
A) Deflation refers to a situation in which the price level is falling.
B) When the price level is falling there is always an incentive to delay spending and so there is a negative effect on economic activity.
C) Cutting interest rates to zero to fight deflation may not work because the opportunities for profitable investment are likely to be limited.
D) Deflation is good for workers because with wages falling there will be plenty of employment opportunities.
Correct Answer:
Verified
Q38: Since, in classical economic theory, both the
Q39: Suppose the nominal interest rate is 7
Q40: According to the classical view, to prevent
Q41: List and define any three of the
Q42: When prices are falling, economists say that
Q45: Deflation
A) Increases incomes and enhances the ability
Q47: Which of the following statements is NOT
Q48: Suppose that, because of inflation, a business
Q103: What assumptions are necessary to argue that
Q106: Define each of the symbols and explain
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents