A sudden decrease in the U.S.price level
A)makes those with dollar debts worse off.
B)makes those with dollar debts better off.
C)do not affect those with dollar debts.
D)makes those with DM worse off.
E)makes creditors worse off.

Question

Quizplus · Accepted Answer

A sudden decrease in the U.S. price level would lead to deflation, causing the value of the dollar to increase. Those with dollar debts, such as borrowers, would find it harder to repay their debts with a stronger dollar and would be worse off.

A Sudden Decrease in the U.S.price Level