What Is the Main Problem with Mild Inflation, According to Some

question 140

Multiple Choice

What is the main problem with mild inflation, according to some economists?

• A)It reduces the size of the GDP gap.
• B)It leads to unanticipated deflation.
• C)It increases frictional and structural unemployment in the economy.
• D)It diverts productive time toward activities to hedge against inflation.

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Definitions:

Maximize Profits

The process of increasing the financial gain from business activities to the highest possible level.

Product Availability

The extent to which goods are in stock and accessible for purchase by consumers.

Postponement

A strategy that involves delaying the final activities in the provision of a product until after receiving a customer order, helping to reduce inventory and improve customization.

Variety of Products

A wide range of different products offered by a company to meet diverse customer needs or preferences.