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Economics · May / June 2021 · Paper 12 · Question 20

2281Inflation

What is likely to happen when a country is experiencing deflation?

  1. AConsumers delay spending.
  2. BGovernments raise interest rates.
  3. CThe level of imports increases.
  4. DThe real value of money falls.

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Correct answer: A. Consumers delay spending.

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