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.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter24: The Aggregate Demand/aggregate Supply Model
Section: Chapter Questions
Problem 53CTQ: The AD/AS model is static. It shows a snapshot of the economy at a given point in time. Both...
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