The uncertainty that results from inflation causes changes in
A)Consumption,saving,and investment behavior.
B)Saving and investment behavior,but not consumption.
C)Consumption,but not saving and investment behavior.
D)Income,but not consumption.

Question

Quizplus · Accepted Answer

Inflation creates uncertainty about future prices, which affects the purchasing power of money. As a result, consumers may adjust their consumption patterns, saving habits, and investment decisions. If prices are expected to rise in the future, consumers may buy more now to avoid paying higher prices later. Conversely, if prices are expected to fall, consumers may delay purchases. This uncertainty also affects saving and investment behavior, as inflation can erode the value of savings and returns on investments. Therefore, option A is the correct answer.

The Uncertainty That Results from Inflation Causes Changes in