Which of the following is not a cost posed by inflation?
A)Inflation reduces the affordability of goods and services to the average consumer.
B)The money that consumers and firms hold loses its purchasing power.
C)Firms must pay for changing prices on products and printing new catalogues.
D)Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.
E)Firms must hire experts to predict inflation more accurately.

Question

Quizplus · Accepted Answer

Inflation primarily affects the economy by reducing the purchasing power of money, leading to higher costs for changing prices, and necessitating predictions about future inflation. However, it does not directly reduce the affordability of goods and services to the average consumer; rather, it affects how much goods and services can be bought with a given amount of money.

Which of the Following Is Not a Cost Posed by Inflation