Higher Inflation

question 79

Multiple Choice

Higher inflation

• A)causes firms to change prices less frequently and makes relative prices less variable.
• B)causes firms to change prices less frequently and makes relative prices more variable.
• C)causes firms to change prices more frequently and makes relative prices less variable.
• D)causes firms to change prices more frequently and makes relative prices more variable.

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Definitions:

Balance of Payments

A record of all economic transactions between the residents of a country and the rest of the world within a specific period.

Goods Deficit

A situation where a country's imports of physical goods exceed its exports, leading to a negative balance in trade for physical goods.

Exchange Rate

The value of one currency for the purpose of conversion to another, affecting international trade, investments, and economic relations between countries.

British Pounds

The currency of the United Kingdom, symbolized by £, and one of the major currencies traded worldwide.