Asset deflation generally:
A)is more harmful than the preceding inflation was helpful.
B)is less harmful than the preceding inflation was helpful.
C)is neither good nor bad, it merely redistributes income.
D)cannot occur because people will know it will follow asset inflation.

Question

Quizplus · Accepted Answer

Asset deflation is often considered more harmful than the preceding inflation was helpful because it can lead to a downward spiral in the economy, reducing consumer spending, leading to lower production, higher unemployment, and financial instability.

Asset Deflation Generally