The deflation of the 1930s impacted the U.S.economy because it led some consumers to ________ and because it ________.
A)postpone purchases while they waited for prices to fall even lower; increased the burden on borrowers
B)demand higher wages in anticipation of prices eventually rising again; increased manufacturing since firms could afford to hire more labor
C)borrow more money since money was now cheap; reduced the amount of money consumers would have to pay back on their outstanding loans
D)increase purchases to take advantage of the falling prices; increased the burden on lenders

Question

Quizplus · Accepted Answer

The deflation of the 1930s led some consumers to postpone purchasing goods and services while they waited for prices to fall even lower, reducing overall demand and economic activity. Additionally, deflation increased the burden on borrowers since the real value of their outstanding loans increased, making it more difficult for them to repay their debts.

The Deflation of the 1930s Impacted the U