Which of the following is a microeconomic consequence of inflation?
A)Greater unemployment.
B)Greater real income.
C)Wealth effects.
D)None of the other choices.

Question

Quizplus · Accepted Answer

Inflation can lead to wealth effects, which refer to the change in the value of assets and liabilities. Inflation can increase the value of assets such as real estate or stocks, but decrease the value of liabilities such as loans. This can create winners and losers in the economy, as those who hold more assets than liabilities benefit from inflation while those who hold more liabilities than assets suffer. This is a microeconomic consequence as it primarily affects individual households and firms. The other answer choices are macroeconomic consequences of inflation.

Which of the Following Is a Microeconomic Consequence of Inflation