Economists fear deflation because:
A) falling prices make firms more susceptible to bankruptcy.
B) consumers anticipating further price declines will delay purchases.
C) falling revenue increases the likelihood that workers will be laid off.
D) of all these reasons.

Question

Quizplus · Accepted Answer

Deflation can lead to a vicious cycle of reduced consumer spending, lower revenues for businesses, increased bankruptcies, and higher unemployment, making all the reasons valid concerns.

Economists Fear Deflation Because