How does deflation impact the economy?(1 point) Responses It creates a healthy economy. It creates a healthy economy. It increases the employment rate. It increases the employment rate. People may become unemployed or paid less. People may become unemployed or paid less. People having extra money makes prices go up.

Answer 1

The correct response regarding the impact of deflation on the economy is: People may become unemployed or paid less.

Deflation can lead to decreased consumer spending as people anticipate lower prices in the future, resulting in businesses earning less revenue. This can lead to cost-cutting measures, including layoffs and reduced wages, ultimately increasing unemployment and harming economic growth.