Deflation is a great economic problem because:
A) Social Security costs rise very fast.
B) people have difficulty paying back their debts.
C) consumers can not afford to maintain their usual lifestyles.
D) firms have a difficult time selling their goods and services.

Question

Quizplus · Accepted Answer

Deflation increases the value of money, making it harder for people to pay back debts they have taken out at higher prices. This creates a cycle of decreasing demand, lower prices, and higher real debt burdens.

Deflation Is a Great Economic Problem Because