Multiple Choice
According to Keynes, why might deflation create problems for an economy?
A) Consumers might expect prices to fall further and cut back consumption now.
B) In expectation of increased spending, too many entrepreneurs would begin businesses and most would fail.
C) Producers might increase production to take advantage of falling input prices.
D) People would drop out of unions because unions would become ineffective at keeping wages of members high.
Correct Answer:

Verified
Correct Answer:
Verified
Q58: The interest rate effect helps to explain
Q59: In the summer of 1953, the Korean
Q60: Describe two ways in which the macro
Q61: Refer to the graph shown. No changes
Q62: Explain the difference between the long run
Q64: Refer to the graph shown. A policy
Q65: With an upward-sloping short-run aggregate supply curve,
Q66: If actual output exceeds potential output, eventually:<br>A)input
Q67: In the 1990s, the price level in
Q68: Refer to the graph shown. In the