T/F 5. Based on a paper in the American Economic Review (Papers and Proceedings), excluding the...

T/F

5. Based on a paper in the American Economic Review (Papers and Proceedings), excluding the Great Depression, most experiences with deflation did not result in depression.

6. Woods argues that increasing consumption does not drive wealth creation.

7. The problem with bankruptcy is that we lose these assets and the production they used to generate.

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Expert Solution

T/F

5. Based on a paper in the American Economic Review (Papers and Proceedings), excluding the Great Depression, most experiences with deflation did not result in depression.

Answer: false because deflation means slowing down of price whereas depression is severe slowdown in economic growth. During depression, deflation leads to further reduction in output. So further slowing down the economic growth.

6. Woods argues that increasing consumption does not drive wealth creation.

Answer: true because if consumption increases its means purchasing of the individual also increase it will leads to increase income however wealth will also increase but it depends on saving rate.

7. The problem with bankruptcy is that we lose these assets and the production they used to generate.

Answer: true bankruptcy is a legal status of a person in which she/he unable to pay debt t. Sometimes there is a case of loosing asset.

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Rahul Sunny answered 1 week ago

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