The effects of asset price inflation and asset price deflation generally:
A)even out.
B)have unequal effects on the economy.
C)are unrelated.
D)are addressed by policymakers.

Question

Quizplus · Accepted Answer

Asset price inflation and asset price deflation have unequal effects on the economy. Asset price inflation can lead to increased wealth and spending for asset holders, potentially overheating the economy. Asset price deflation, on the other hand, can lead to decreased wealth, reduced spending, and can contribute to economic downturns or recessions. The asymmetry in their impacts makes their effects unequal.

The Effects of Asset Price Inflation and Asset Price Deflation