Unexpected and large deflation is desirable, according to the Friedman rule.

Name: Unexpected and large deflation is desirable, according to the Friedman rule.
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Question

​Unexpected and large deflation is desirable, according to the Friedman rule.

Quizplus · Accepted Answer

The Friedman rule suggests that the optimal nominal interest rate is zero, which implies a very low, but not necessarily negative, inflation rate. Unexpected and large deflation can lead to economic issues such as increased real debt burdens and reduced consumer spending, which are not considered desirable outcomes.

​Unexpected and Large Deflation Is Desirable, According to the Friedman

Unexpected and Large Deflation Is Desirable, According to the Friedman