This flashcard is just one of a free flashcard set. See all flashcards!
69
What was the effect of deflation on debtors?
Deflation harms borrowers (b/c they have to pay back more value), so firms and households didn't want to take on existing debt when their current debt was becoming more burdensome, so there was no investment spending.
Flashcard info:
Author: savhighsmith
Main topic: Economics
Topic: History of Economics
School / Univ.: UGA
City: Athens
Published: 11.12.2010