Consumer prices in the Eurozone fell in January for a second consecutive month reinforcing fears of sustained
Question:
Consumer prices in the Eurozone fell in January for a second consecutive month reinforcing fears of sustained deflation, higher unemployment, and stagnant incomes.
a. Explain the process by which deflation occurs.
b. How might aggregate demand in Europe be increased? Might the increase in aggregate demand create demand-pull inflation?
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a Deflation occurs when there is a sustained decrease in the general price level of goods and services in an economy over time This can happen due to ...View the full answer
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