Between 1880 and 1896 the price level in the United States f

Between 1880 and 1896, the price level in the United States fell 23 percent. This movement was ______ for bankers of the Northeast and ______ for farmers of the South and West.

bad; bad

good; good

bad; good

good; bad

please explain!

Solution

Between 1880 and 1896 the price level in the US fell 23%. This movement was good for the bankers of the northeast and bad for farmers of the south and west. With the reduction of inflation real interest rate is closer to nominal interest so bankers would be better off and workers would still be worse of because when prices fall producers do not reduce product price at once and give smaller amounts to workers each year.

the correct option is (c)