Deflationary periods can be downward spirals of price reductions, declining profit margins, and corporate cutbacks.

Question

Quizplus · Accepted Answer

During deflationary periods, prices of goods and services decrease, which can lead to reduced profit margins for companies. In response, companies may cut back on expenses, including layoffs, to maintain profitability, potentially leading to a cycle of reduced consumer spending and further deflationary pressures.

Deflationary Periods Can Be Downward Spirals of Price Reductions, Declining