One Adverse Effect of Unexpectedly High Rates of Inflation Is

question 40

Multiple Choice

One adverse effect of unexpectedly high rates of inflation is that such inflation

• A) redistributes income away from those with fixed money incomes.
• B) redistributes income to lenders.
• C) increases the value of savings.
• D) encourages productive rather than speculative uses of saving.
• E) causes real incomes to rise more rapidly than money incomes.

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Definitions:

FASB ASC

The Financial Accounting Standards Board Accounting Standards Codification, which is the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities.

Quantitative Assessment

The evaluation or measurement of something based on quantity or amounts.

Qualitative Assessment

An analysis method that focuses on non-quantifiable factors such as company quality, business model, governance, and risk factors.

Equity Method

An accounting technique used by a company to record its investment in another company when it holds significant influence but not full control.