In a period of rapid, unexpected inflation, resources can be lost
A) because rapid inflation almost always turns into a hyperinflation.
B) when firms invest in research and development instead of forecasting inflation.
C) when firms use resources to forecast inflation.
D) Both answers B and C are correct.

Question

Quizplus · Accepted Answer

During rapid, unexpected inflation, firms may allocate resources to forecast inflation, which could otherwise be used for productive activities, leading to a loss of resources.

In a Period of Rapid, Unexpected Inflation, Resources Can Be