If an economy is experiencing deflation, a decrease in the price level, then the most advantageous actions would be
A)borrowing money at a fixed interest rate and buying a house.
B)borrowing money at a fixed interest rate and buying land.
C)keeping money in a checking account.
D)keeping your wealth in gold and other precious metals.

Question

Quizplus · Accepted Answer

During deflation, the purchasing power of money increases, meaning that the same amount of money can buy more goods and services. Therefore, it is best to keep money in a checking account or other low-risk, interest-bearing account where it will retain its value. Borrowing money to buy assets such as a house or land may not be advantageous as the value of those assets may decrease during deflation. Keeping wealth in gold and other precious metals can be risky as their value can be volatile and subject to speculation.

If an Economy Is Experiencing Deflation, a Decrease in the Price