Which of the following statements about deflation is true?
A)Economists generally agree that deflation is good for consumers and the economy as a whole.
B)Economists fear deflation because it could lead to a wave of bankruptcies and a downward spiral.
C)Deflation would reduce unemployment, but it could encourage business investment.
D)Consumers will increase their spending if they expect deflation to continue.

Question

Quizplus · Accepted Answer

Economists fear deflation because it can lead to decreased consumer spending, reduced business revenues, and increased debt burdens, potentially causing bankruptcies and a downward economic spiral.

Which of the Following Statements About Deflation Is True