Question

Close KNOWLEDGE CHECK Here is the vicious deflationary cycle. What step connects the upper right blue arrow to the lower left gray arrow? Workers expect prices to increase Workers demand pay increases pun Prices decline Company revenues decline Click to open/close image. « PREV SUBMIT KNOWLEDGE CHECK И. Consumers defer purchases to await lower prices V Prices decline F Companies let go of workers to cut costs A

Answer 1

The step that connects the upper right blue arrow to the lower left gray arrow in the vicious deflationary cycle is Workers demand pay increases.

Step-by-step explanation:

The step that connects the upper right blue arrow to the lower left gray arrow in the vicious deflationary cycle is Workers demand pay increases. When workers expect prices to increase, they demand higher wages. This leads to an increase in costs of production for companies. As a result, companies may experience declining revenues and lower profits, which can lead to declines in prices in the market.