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

question 25

Multiple Choice

In a period of rapid, unexpected inflation, resources can be lost

• A)because rapid inflation almost always turns into hyperinflation.
• B)when firms use resources to forecast inflation.
• C)when firms invest in research and development instead of forecasting inflation.
• D)Both answers B and C are correct.

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Definitions:

Long Run

A period in economics during which all factors of production and costs are variable, allowing full adjustment to any change in the economic environment.

Break-Even Point

This is the point at which total revenues equal total costs, and the business or project makes neither a profit nor a loss.

Firm's Output

The quantity of goods or services produced by a firm within a given time period.

Short Run

A period in economics where at least one factor of production is fixed and cannot be changed.