The uncertainty of inflation is likely to affect:
A) Production and consumption decisions.
B) Production decisions but not consumption decisions.
C) Consumption decisions but not savings.
D) The elderly on fixed incomes but not current wage earners.

Question

Quizplus · Accepted Answer

Inflation can affect production decisions, as businesses may adjust their output levels in response to changing prices, and consumption decisions, as individuals may alter their spending patterns to account for changes in the cost of goods and services. It can also impact savings, as individuals may seek to save more or less depending on inflation expectations. Finally, it can have a particular impact on the elderly on fixed incomes, as inflation erodes the purchasing power of their savings and income.

The Uncertainty of Inflation Is Likely to Affect