Sam is a recent college graduate with a lot of firsts: First professional job, first new car, first apartment, and first time making all of his own financial decisions. As he works on his monthly budget, he can't help but wonder why he is barely making ends meet. Each month, it takes his entire paycheck to pay his rent, his car payment, and buy food. Last month, he told his parents, "I'm sure I had more money when I was a starving student!" You recently learned about key economic indicators in your business class. You inform Sam that his problems are caused by severe deflation and lack of demand for products and services.

Question

Quizplus · Accepted Answer

The given explanation does not accurately describe the cause of Sam's financial struggles. Severe deflation and lack of demand for products and services typically lead to lower prices for goods and services, which can actually benefit consumers like Sam. The more likely explanation for Sam's financial struggles is that he may not be earning enough income or is overspending on unnecessary expenses.

Sam Is a Recent College Graduate with a Lot of Firsts