High volatility in the inflation rate can result in:
A) improper allocation of resources.
B) sudden changes in output.
C) low volatility in the CPI.
D) deflation.

Question

Quizplus · Accepted Answer

High volatility in the inflation rate can lead to improper allocation of resources because businesses and consumers may not be able to accurately predict future prices, which can lead to inefficient investment and consumption decisions.

High Volatility in the Inflation Rate Can Result In