How come lower gas prices and deflation are a bad thing?
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(3 points) Is Walmart Good for America? Read John Miller, "What's Good for Wal-Mart"ĀĀ (article 4.4 in Real World Micro). Are lower prices at Walmart necessarily good? Would it be a good or bad thing if Walmart raised wages and raised prices? What would you need to know to answer these questions? What do you think? Explain and support your opinion.
However, we rarely discuss deflation in economics courses. The last time it happened in the US was during the Great Depression. Japan deal with deflation during the 1990s and off and on since then. China has come close, but central bank actions seem to have prevented it. And now the Euro Zone is facing possible deflation to which the European Central Bank has finally started to respond.
This week explore the causes of deflation, why it is considered to have negative consequences for an economy and how can it be prevented or stopped once started. Is there a linkage between inflation and deflation?
Do respond to all of these parts so as to provide a complete picture.
