Inflation Can Cause a Misallocation of Resources Because

question 198

Multiple Choice

Inflation can cause a misallocation of resources because

• A) inflation doesn't proceed evenly which means that people have a difficult time determining when a price change signals a change in relative prices.
• B) firms have to change their price labels at unusual times.
• C) the nominal rate of inflation doesn't equal the real rate of inflation.
• D) people are encouraged to borrow too much.

---

Definitions:

Cure the Delivery

The process of rectifying any issues or defects present in the delivery of goods under a contract, thereby fulfilling the delivery obligations fully and properly.

Tender

An offer to perform an obligation or a bid to buy securities, goods, or services at a specific price.

Tender of Payment

The presentation of money or a means of payment to fulfill a debt or obligation, usually in the exact amount owed.

Conforming Goods

Goods that meet the specifications and standards outlined in a sales contract.