Why Is Unanticipated Inflation Usually Viewed as Undesirable

question 112

Multiple Choice

Why is unanticipated inflation usually viewed as undesirable?  

• A) because it reduces everyone's nominal wages 
• B) because it redistributes income and wealth 
• C) because it is accompanied by reductions in real GDP 
• D) because it usually results in the public sector growing less rapidly than the private sector

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding the cost of materials and direct labor.

Interest Expense

The cost incurred by an entity for borrowed funds, typically reflected in the income statement as a deduction from earnings.

Accounts Receivable Turnover

A financial ratio that measures how often a company collects its average accounts receivable balance over a period.

Inventory Turnover

A metric that measures how many times a company's inventory is sold and replaced over a specified period.