Is below statement correct?
Deflation should not be an issue if the human nature tend to have self-control bias for consuming. People have a strong desire to consume sooner rather than later.
Self control bias In the exam context, the best example is failing to act in pursuit of your long-term financial objectives due to a lack of self-discipline. In other words its failing to save for retirement or sometimes taking too much risk to catch up (mainly Equities).
I dont see in the curriculum mentioning about inflation and deflation, of course if its in deflationary environment it would be best for him if he didnt save and consumed.
I know that this was a long time ago, but here is what I think
- Self ctrl=>lack of self ctrl=>will not meet LT goal
- Deflation=>future price will be lower (so will LT goal)=>Will be easier to meet LT goal=>self ctrl bias will not be important