Questions: True or false: The real value of assets and debt falls in case of deflation. State whether this statement is true of false.

True or false: The real value of assets and debt falls in case of deflation. State whether this statement is true of false.
Transcript text: True or false: The real value of assets and debt falls in case of deflation. State whether this statement is true of false.
failed

Solution

failed
failed

The answer is False: The real value of assets and debt falls in case of deflation.

Explanation:

  • Deflation refers to a decrease in the general price level of goods and services. When deflation occurs, the purchasing power of money increases because each unit of currency can buy more than before.
  • As a result, the real value of money-denominated assets and debts actually increases during deflation. This is because the nominal value remains the same, but the purchasing power of that nominal value is higher.
  • Therefore, the statement that the real value of assets and debt falls in case of deflation is false. In fact, the real value rises.

In summary, during deflation, the real value of assets and debts increases, not decreases.

Was this solution helpful?
failed
Unhelpful
failed
Helpful

Questions asked by other users

failedAnswered
Graphs and Functions Domain and range from the graph of a continuous function The entire graph of the function g is shown in the figure below. Write the domain and range of g using interval notation. (a) domain = (b) range =
failedAnswered
Which conditions should be met for an effective service learning experience? Students should be given ample opportunity to reflect about their experience. Students should be obliged to participate in a program in which they lack experience. Students should focus primarily on what they will get out of the service activity. Students should have some degree of choice in the service activity in which they participate.
failedAnswered
Suppose the probability of an event is 20/27. What are the odds for the event happening? to What are the odds against the event happening? to
failedAnswered
Problem. 23: Use a double integral to find the volume of the solid shown in the figure. ? cubic units Problem. 24: Find the volume of the solid bounded above by the surface z=f(x, y) and below by the plane region R. f(x, y)=3y/(1+x^2) ; R is the region bounded by y=0, y=sqrt(x), x=16 ? cubic units Problem. 25: The price of land in a rectangular region R of a city is approximated by the function p(x, y)=150-13(x-1/2)^2-13(y-1)^2, 0 ≤ x ≤ 1, 0 ≤ y ≤ 2 where p(x, y) is the price of land in dollars per square foot and x and y are measured in miles. What is the average price of land per square foot in R? (Round your answer to the nearest dollar.) 1575
failedAnswered
Express the given percent as a decimal. 10% 10% = (Type an integer or a decimal.)