When a recession begins and unemployment begins to rise, the demand for goods and services will fall. If the decline in demand is precipitous, which of the following will occur?
A) hyperinﬂation
B) deﬂation
C) rising interest rates
D) rising inﬂation

Question

Quizplus · Accepted Answer

When the demand for goods and services falls, it leads to an oversupply of goods and services in the market, which generally results in a decrease in prices. This phenomenon is called deflation.

When a Recession Begins and Unemployment Begins to Rise, the Demand