ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Decrease in unemployment
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Reduction in production
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Increase in production
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Increased spending on goods and services
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Detailed explanation-1: -Deflation reduces production of goods and services due to reduction in demand for goods and services from the consumers. Reduction in production of goods and services leads to reduced investments, reduction in the salaries of employees, and also increase unemployment.
Detailed explanation-2: -Deflationary spiral. Falling prices may result in less production. Less production may lead to lower pay. Lower pay may result in a drop in demand. And a drop in demand may cause increasingly lower prices.
Detailed explanation-3: -A decline in price for key production inputs (e.g., oil) will lower production costs. Producers will be able to increase production output, which will lead to an oversupply in the economy. If demand remains unchanged, producers will need to lower their prices on goods to keep people buying them.
Detailed explanation-4: -Rural unemployment is more severe than urban unemployment. Economic development can reduce unemployment. Under employment is found in both rural and urban areas. More items