Since the prices of goods and services are falling, deﬂation positively affects workers and ﬁrms.

Question

Quizplus · Accepted Answer

Deflation typically results in a decrease in demand, which can lead to layoffs, decreased profits for firms, and overall economic instability. While lower prices may benefit consumers, they can also lead to a decrease in willingness to spend and invest, further exacerbating the negative effects of deflation.

Since the Prices of Goods and Services Are Falling, Deﬂation