One of the reasons macroeconomists have concerns about inflation is that inflation causes:
A) real GDP to exceed nominal GDP.
B) wages to rise as fast as prices.
C) real GDP to rise.
D) nominal GDP to fall.
E) relative prices to change.

Question

Quizplus · Accepted Answer

Inflation causes relative prices to change, meaning that the prices of goods and services shift in relation to each other. This can lead to distortions in the economy, making it harder to allocate resources efficiently and increasing uncertainty for businesses and consumers. Inflation can also decrease the purchasing power of money, reducing overall economic welfare.

One of the Reasons Macroeconomists Have Concerns About Inflation Is