Question

a depression ________.

a. can only be resolved through government intervention
b. results in higher demand for goods and services
c. is the height of the business cycle
d. is a short - term situation
e. is usually associated with falling prices (deflation)

Explanation:

• Option A: Depressions can sometimes be alleviated by government intervention, but saying "only" is incorrect as other factors or market adjustments can also play a role.
• Option B: In a depression, demand for goods and services typically falls, not rises, due to high unemployment and low consumer confidence.
• Option C: The height of the business cycle is a peak, not a depression (which is a severe downturn).
• Option D: A depression is a long - term economic downturn, not short - term.
• Option E: During a depression, there is often a significant decrease in economic activity, leading to falling prices (deflation) as supply outstrips demand.

Answer:

E. is usually associated with falling prices (deflation)