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Suppose People Believe That Prices Will Continue to Fall in the Future

Question 66

Multiple Choice

Suppose people believe that prices will continue to fall in the future, and so they put off buying things now. As a result, prices fall. In economics we refer to this as a(n) :


A) Nash equilibrium.
B) endowment effect.
C) self-confirming equilibrium.
D) precommitment strategy.

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