The main reason that many businesses fail when the price level is fall

The main reason that many businesses fail when the price level is falling is that ________.

A) deflation causes a decline in short-run aggregate supply
B) as prices fall, businesses are unable to predict the quantity of output they will be able to sell
C) the real value of the firms assets declines in proportion to the decrease in the price level
D) falling prices mean that regular loan payments become increasingly difficult

ANSWER

D