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Suppose People Believe That Prices Will Continue to Fall in the Future

Question 18

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Suppose people believe that prices will continue to fall in the future, and so they put off buying things now. As a result, prices fall. In economics we refer to this as a(n) :


A) Nash equilibrium.
B) endowment effect.
C) self-confirming equilibrium.
D) precommitment strategy.

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