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Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. Can you explain this answer?.

Solutions for Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. Can you explain this answer? in English & in Hindi are available as part of our courses for GMAT. Download more important topics, notes, lectures and mock test series for GMAT Exam by signing up for free.

Here you can find the meaning of Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. Can you explain this answer?, a detailed solution for Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. Can you explain this answer? has been provided alongside types of Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Irrespective of the general state of the economy, paying less for the same thing appeals to most consumers, who seem to have an intuitive dislike for inflation. But much as we may like to pay less, a sustained decline in prices, deflation, may not be in our best interests. Deflation, in fact, is considered to be a bigger evil than inflation, and evokes strong action by policymakers who would try everything possible to prop up prices. Deflation often results from a slowdown in which reduction in demand vis-à-vis supply causes prices to dip. With a sharp decline in prices, consumers tend to postpone purchases in the belief that prices will head further lower. This adds to the pressure on businesses, which in addition to a fall in prices also see an accumulation of inventory. Production cuts are hence resorted to, resulting in factory closures and consequent layoffs or salary cuts. With unemployment increasing, income levels in the economy fall, leading to further cuts in consumer spending and more pressure on prices. A vicious cycle emerges; the cascade effect is felt across sectors; and the economy goes into defeatist mode.To prevent deflations and to tackle the downward spiral caused by them, governments resort to large-scale spending, undertaking massive projects to increase employment, incomes, and prices and pumping in huge sums of money to propel demand. For instance, in the aftermath of the financial market crash in 2008, the US government undertook big-ticket stimulus measures and QE (quantitative easing) to revive the economy.However, not all dips in prices are bad. A fall in prices of goods and services due to technological innovations and increased competition could actually benefit both the consumers and the producers. Such a situation is very different from deflation, which affects prices across the economy on a sustained basis (mainly due to decreasing demand or liquidity problems) and which should indeed be considered a red flag.As per the passage, which of the following would most likely be considered a dip in prices beneficial to both the consumer and the producer?a)Because of a breakthrough in diamond mining, the price of the diamond dips, with it becoming affordable for more people but losing its unique selling appeal as a luxury item.b)Because of the cancellation of an order, the producer reduces the price of the goods in stock considerably and sells them to another buyer.c)Because of a change in policy, producers can now procure raw materials for producing garments at cheaper prices from nearby countries and hence save on their cost of production.d)Because of an increasing competition from cheaply produced and imported goods, the local producers reduce the prices of their goods to sell off their existing stock at initiate production cuts.e)Because of a new technology, the manufacturers of personal computers are able to reduce their cost of production and pass these savings to the consumers as well by lowering the prices.Correct answer is option 'E'. 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