The Main Cost That Low Inflation Imposes on an Economy

question 15

Multiple Choice

The main cost that low inflation imposes on an economy is that low inflation

• A)inevitably leads to high inflation.
• B)distorts some economic decisions.
• C)reduces real wages.
• D)benefits lenders at the expense of borrowers.

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Definitions:

Indorser

A person who signs a negotiable instrument, such as a check, over to someone else, thereby making the recipient the legal owner of the document.

Secondary Liability

Legal responsibility of a third party for acts of another when that party has indirect involvement or benefits from the wrongful acts.

Without Recourse

A term indicating that the holder of a financial instrument cannot demand payment from the originator if the primary obligor defaults.

Holder In Due Course

A legal term for someone who has acquired a negotiable instrument in good faith for value and without notice of any defect.