The deflation of the 1930s impacted the U.S. economy because it led some consumers to ________ and because it ________.
A) demand higher wages in anticipation of prices eventually rising again; increased manufacturing since firms could afford to hire more labor
B) increase purchases to take advantage of the falling prices; increased the burden on lenders
C) postpone purchases while they waited for prices to fall even lower; increased the burden on borrowers
D) borrow more money since money was now cheap; reduced the amount of money consumers would have to pay back on their outstanding loans
Question 2
Long lags associated with the legislative process in implementing fiscal policy make it more difficult to use than monetary policy.
Indicate whether the statement is true or false
In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it.
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