Which of the Following Is Correct

question 294

Multiple Choice

Which of the following is correct?

• A)Inflation impedes financial markets in their role of allocating savings to alternative investments.
• B)Inflation encourages savings through the tax treatment on capital gains.
• C)Inflation encourages larger holdings of currency by the public.
• D)Inflation reduces people's real purchasing power.

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Definitions:

Global Sourcing

The practice of seeking resources, goods, or services from the global market, typically to leverage cost advantages, expertise, or efficiencies.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio.

Global Economy

refers to the interconnected worldwide economic activities and exchanges that transcend national borders.

China's Foreign Direct Investment

Investments made by China in business interests in other countries, in the form of ownership of firms or establishment of manufacturing or service facilities.