Inflation is an economic problem because it
A)leads inevitably to unemployment.
B)makes prices less useful as signals for resource allocation.
C)leads to recession.
D)results in rapid increases in the money supply.

Question

Quizplus · Accepted Answer

Inflation makes prices less useful as signals for resource allocation as they become distorted and unpredictable, leading to market inefficiencies and misallocation of resources.

Inflation Is an Economic Problem Because It