When Inflation Causes Relative-Price Variability

question 63

Multiple Choice

When inflation causes relative-price variability,

• A)consumer decisions are distorted and the ability of markets to efficiently allocate factors of production is impaired.
• B)consumer decisions are distorted,but markets are still able to efficiently allocate factors of production.
• C)consumer decisions are not distorted,but the ability of markets to efficiently allocate factors of production is impaired.
• D)consumer decisions are not distorted and markets are still able to efficiently allocate factors of production.

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Definitions:

Operating Efficiency

The ability of an organization to minimize its input costs while maximizing its output without compromising quality.

Boundaryless Sourcing

A business strategy that involves procuring goods or services from any supplier globally without geographical restrictions.

Outsourcing

The practice of hiring third-party vendors to perform services or produce goods that were previously handled in-house.

External Environment

The surrounding conditions, including economic, legal, political, technological, and social factors, that influence an organization's operations from outside.