What is price deflation, In the same article, Ambrose

What is price deflation

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In an article in the American Free Press, Professor Peter Spencer of York University in England is quoted as saying: "This printing of money ‘will keep the [deflation] wolf from the door.' " In the same article, Ambrose Evans-Pritchard, a writer for the London-based newspaper The Telegraph, is quoted as saying: "Deflation has ... insidious traits. It causes shoppers to hold back. Once this psychology gains a grip, it can gradually set off a self-feeding spiral that is hard to stop."

a. What is price deflation?

b. What does Professor Spencer mean by the statement, "This printing of money ‘will keep the [deflation] wolf from the door'"?

c. Why would deflation cause "shoppers to hold back," and what does Evans-Pritchard mean when he says: "Once this psychology gains a grip, it can gradually set off a self-feeding spiral that is hard to stop"?

Reference no: EM131023242

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