on 5 of 25 >Classify the statements as true or false by placing them in the correct category.TrueDeflation often results in a decrease in aggregate demand.Answer BankDeflation is a theoretical possibility but almost never occurs.Deflation is when the rate of inflation decreases.Answer BankFalseDeflation occurs when the aggregate price level falls.Deflation does not affect people in the economy uniformly. Some people are made better off and others are made worse off.

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Deflation often results in a decrease in aggregate demand. Deflation is a theoretical possibility but almost never occurs. Answer Bank Deflation is when the rate of inflation decreases. Deflation occurs when the aggregate price level falls. Deflation does not affect people in the economy uniformly. Some people are made better off and others are made worse off.

Deflation often results in a decrease in aggregate demand. Deflation is a theoretical possibility but almost never occurs. Answer Bank Deflation is when the rate of inflation decreases. Deflation occurs when the aggregate price level falls. Deflation does not affect people in the economy uniformly. Some people are made better off and others are made worse off.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following is an effect of deflation on debt? a) Debt becomes easier to repay b) Debt becomes more burdensome c) Debt levels remain unchanged d) Debt becomes irrelevant
Income tax collections: Group of answer choices rise during a recession, thus reduce the severity of the recession. rise during a recession, thus increase the severity of the recession. fall during inflationary episodes, thus increase the severity of the inflation. fall during a recession, thus reducing the severity of the recession.
The short-run aggregate supply curve slopes upward because a higher price level Group of answer choices raises real wages if nominal wages are sticky. raises nominal wages if real wages are sticky. reduces nominal wages if real wages are sticky. reduces real wages if nominal wages are sticky.
All prices rise evenly during periods of inflation and deflation.TrueFalse
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In which of the following situations will demand pull inflation fall? a) Rising aggregate supply b) Reduced taxes c) Rising incomes d) Decreased imports e) Aggregate demand rising with aggregate supply lags
Deflation is particularly bad for an economy in recession for all of the following reasons EXCEPT a-with deflation people spend less expecting prices to be lower in the future b- the rising prices makes goods more expensive c- with deflation the value of assets declines while the value of loans does not - this lowers wealth and further depresses spending
When the Fed increases the rate of growth of the money supply to jump start the economy, the unemployment type that will be directly affected is the: Group of answer choices frictional unemployment. natural rate of unemployment. structural unemployment. cyclical unemployment.
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