For which of the following reasons is a low level of inflation desirable and deflation undesirable?
A) It reflects a healthy economy; people have money and are willing to spend it.
B) A low level of inflation keeps a currency from edging too near deflation.
C) Inflation helps to justify investment and keeps a currency strong.
D) Deflation means that the currency is increasing in value, and is actually desirable.
Correct Answer:
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