The adverse consequences of debt deflation are most evident ________.

Question

Quizplus · Accepted Answer

The adverse consequences of debt deflation are most evident on the balance sheets of nonfinancial businesses. As debt deflation occurs, the debt burden of nonfinancial businesses increases, making it difficult for them to repay their debt obligations. This leads to a decline in investment and hiring, which in turn leads to further economic contraction. This phenomenon is commonly known as the debt-deflation spiral.

The Adverse Consequences of Debt Deflation Are Most Evident ________