Economic Consequences of Deflation Quiz Explore the impact of deflation on debt, investment, asset prices & more. Test your knowledge on the economic consequences of deflation with this quiz!
#1
Decrease in the general price level of goods and services
Increase in the general price level of goods and services
No change in the general price level of goods and services
Increase in the unemployment rate
#2
Increased purchasing power of consumers
Decreased real wages
Stimulated economic growth
Increased business investment
#3
Consumer goods
Housing market
Financial services
Exports
#4
Asset prices remain stable
Asset prices increase
Asset prices decrease
Asset prices become more volatile
#5
United States
Germany
Japan
United Kingdom
#6
Decrease in the real value of debt
Increase in the real value of debt
No impact on the real value of debt
Reduction in interest rates
#7
Decrease in aggregate demand
Increase in aggregate supply
Tight monetary policy
Expansionary fiscal policy
#8
Deflation shifts the Phillips curve to the right
Deflation shifts the Phillips curve to the left
Deflation has no effect on the Phillips curve
Deflation makes the Phillips curve steeper
#9
Expectations play no role in deflationary spirals
Expectations can reinforce deflationary pressures
Expectations always lead to inflation during deflationary periods
Expectations have a stabilizing effect on prices
#10
Deflation encourages investment due to lower costs
Deflation discourages investment due to reduced profits
Deflation has no impact on investment decisions
Deflation leads to more cautious investment strategies
#11
A situation where interest rates are so high that borrowing becomes unattractive
A situation where central banks flood the market with liquidity
A situation where nominal interest rates are close to zero, but savings do not stimulate borrowing and spending
A situation where the money supply exceeds the demand for money
#12
A situation where debt is completely eliminated
A process where the value of debt increases in real terms due to deflation
A policy to inflate debt levels
A mechanism to reduce interest rates on debt
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