Disinflation may cause

Question

Quizplus · Accepted Answer

Disinflation refers to a slowdown in the rate of inflation, which can lead to a decrease in the required return demanded by investors on financial assets, as they may perceive lower inflation as reducing the risk of eroding returns. A is incorrect, as the value of commodities like gold, silver, and gems is influenced by a range of factors beyond inflation. C is also incorrect, as while disinflation may lead to falling inventory costs for businesses, it does not necessarily guarantee additional profits.

Disinflation May Cause