Debt-deflation leads to lower income because: O falling prices redistribute income from debtors to creditors, which leads to a decline in the total average consumption. O falling prices makes creditors feel wealthier than debtors, which leads to a rise in their investment instead of saving. O a rise in the saving rate leads to a lower amount of real debt in the economy, depressing consumption and therefore income. O falling prices redistribute income from creditors to debtors, which leads to a decline in the average consumption. O a fall in the saving rate leads to higher interest rates and lower income.
Debt-deflation leads to lower income because: O falling prices redistribute income from debtors to creditors, which leads to a decline in the total average consumption. O falling prices makes creditors feel wealthier than debtors, which leads to a rise in their investment instead of saving. O a rise in the saving rate leads to a lower amount of real debt in the economy, depressing consumption and therefore income. O falling prices redistribute income from creditors to debtors, which leads to a decline in the average consumption. O a fall in the saving rate leads to higher interest rates and lower income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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7.
Debt-deflation leads to lower income because：
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Debt-deflation leads to lower income because:
O falling prices redistribute income from debtors to creditors, which leads to a decline in the total average consumption.
O falling prices makes creditors feel wealthier than debtors, which leads to a rise in their investment instead of saving.
O a rise in the saving rate leads to a lower amount of real debt in the economy, depressing consumption and therefore income.
O falling prices redistribute income from creditors debtors, which leads to a decline in the average consumption.
O
a fall in the saving rate leads to higher interest rates and lower income.
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