Inflation
A)leads people to use more resources to reduce money holdings.There is no way it can make labor markets work more efficiently.
B)leads people to use more resources to reduce money holdings.However,it can make labor markets work more efficiently.
C)leads people to use fewer resources to reduce money holdings.There is no way it can make labor markets work more efficiently
D)leads people to use fewer resources to reduce money holdings.However,it can make labor markets work more efficiently.

Question

Quizplus · Accepted Answer

Inflation leads people to use more resources to reduce money holdings, which can increase the velocity of money in circulation and stimulate economic activity. This increased economic activity can lead to a tighter labor market, with more jobs available and higher wages. Therefore, inflation can make labor markets work more efficiently.