Higher inflation makes relative prices
A)more variable,making it more likely that resources will be allocated to their best use.
B)more variable,making it less likely that resources will be allocated to their best use.
C)less variable,making it more likely that resources will be allocated to their best use.
D)less variable,making it less likely that resources will be allocated to their best use.

Question

Quizplus · Accepted Answer

Higher inflation makes relative prices more variable, as the prices of different goods and services adjust at different rates. This can create uncertainty and make it less likely that resources will be allocated to their most efficient use, as businesses and consumers may struggle to make informed decisions about which goods and services to produce or consume.

Higher Inflation Makes Relative Prices