Which of the Following Is True About Inflation

question 118

Multiple Choice

Which of the following is true about inflation?

• A) Inflation promotes social harmony by uniting people against the government.
• B) Inflation is more damaging if it is anticipated.
• C) Accurate anticipation of inflation is possible for everyone who is well informed about economic events.
• D) Those who lend money at a rate below the rate of inflation suffer economic losses.
• E) If people accurately anticipate inflation, their actions will prevent it.

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Definitions:

Midpoint Formula

A more precise way of calculating percentages using the value halfway between P1 and P2 for the base in calculating the percentage change in price and the value halfway between Q1 and Q2 as the base for calculating the percentage change in quantity demanded.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating how sensitive consumers are to price changes.

Hamburger

A popular fast food item consisting of a cooked patty of ground meat, typically beef, placed inside a sliced bun often accompanied with various condiments and toppings.

Slope

The measure of the steepness or inclination of a line or surface, typically expressed as a ratio.