What Is the Effect of a Nation's High Inflation on Its

question 38

Multiple Choice

What is the effect of a nation's high inflation on its business enterprises?

• A)There would not be any impact on the long-term earnings of companies.
• B)It could cause a revaluation of assets.
• C)It could decrease companies' reliance on net monetary liabilities.
• D)It could lead companies to hold more monetary investments.

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Definitions:

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming an additional unit of a good or service.

Total Utility

In economics, the total satisfaction received from consuming a particular quantity of goods or services.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Marginal Utility

The increased happiness a buyer experiences by consuming an extra unit of a product or service.