Which of the following is not an effect of inflation?
A)Redistribute wealth.
B)Change economic behavior and bring about inefficient economic activity
C)Result in action by the Federal Reserve to stop the inflationary spiral
D)Increased uncertainty about the future
E)All of the above are effects of inflation

Question

Quizplus · Accepted Answer

All the options listed (A through D) are indeed effects of inflation. Inflation can redistribute wealth, often from savers to borrowers, change economic behavior by encouraging spending and borrowing over saving, prompt the Federal Reserve or central banks to take action to control the inflationary spiral, and increase uncertainty about the future, affecting investment and saving decisions.

Which of the Following Is Not an Effect of Inflation