In a period of rapid, unexpected inflation, resources can be lost
A) when firms invest in research and development instead of forecasting inflation.
B) when firms use resources to forecast inflation.
C) because rapid inflation almost always turns into a hyperinflation.
D) Both answers B and C are correct.

Question

Quizplus · Accepted Answer

Rapid, unexpected inflation can lead to resource loss when firms allocate resources to forecast inflation, as these resources could have been used more productively elsewhere. Rapid inflation does not almost always turn into hyperinflation, making C incorrect.

In a Period of Rapid, Unexpected Inflation, Resources Can Be