Why do economists worry about extended periods of deflation?
Group of answer choices

When the price level falls, businesses are unable to sell their products at a price high enough to cover costs they have already incurred, putting producers at risk of failure.

When price levels drop, aggregate demand increases.

None of the above.

When price levels drop, the economy needs more time to recover compared to a period of high inflation.

When the price level falls, businesses are unable to sell their products at a price high enough to cover costs they have already incurred, putting producers at risk of failure

Answer Link

codiepienagoya codiepienagoya · Answer 2 · 2021-09-08T14:00:06+02:00

Economists are concerned about deflation because lowering prices result in lower consumption expenditure, a significant factor in economic growth.
Evaluating the business to decreased prices by decreasing their output leading to layoffs and reduced wages. so, the price and demand to the further reduced.
When the price level drops, companies can't sell their products at a price sufficiently high, to cover their already incurring costs, placing producers at risk of failing, this is why economists worry about extended times of deflation.

So, the final answer is " the first choice".

Learn more:

brainly.com/question/12980509