The main reason that many businesses fail when the price level is falling is that ________
A) deflation causes a decline in short-run aggregate supply
B) as prices fall, businesses are unable to predict the quantity of output they will be able to sell
C) the real value of the firms assets declines in proportion to the decrease in the price level
D) falling prices mean that regular loan payments become increasingly difficult
D
You might also like to view...
Andrew is not working, but is available and willing to work after finishing a month-long mission trip for his church. While on his mission, Andrew did not look for work. Andrew is considered
A) unemployed. B) part of the labor force. C) a marginally attached worker. D) a discouraged worker. E) Both answers A and B are correct.
Ceteris paribus, an increase in the government budget deficit increases interest rates in the United States and causes a real appreciation of the dollar
Indicate whether the statement is true or false
An increase in a nation's trade deficit occurs when that nation's exports rise and/or its imports fall
a. True b. False Indicate whether the statement is true or false
A tax is imposed on a certain good. The tax produces revenue of $5,000 for the government. The tax reduces consumer surplus by $3,000 and it reduces producer surplus by $4,000 . What is the amount of the deadweight loss of the tax?