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.

---

Definitions:

Breadwinner

A person who earns money to support their family, typically the sole or primary earner in a household.

Discretionary Income

Money remaining after the costs of basic necessities have been paid.

Basic Necessities

Essential items required for survival, including food, clothing, shelter, and clean water.

Lack of Education

A state or condition where an individual has not received sufficient formal learning or instruction.