Industries with cyclical products such as lumber and copper are more sensitive to inflation-induced profits because many sales prices and/or expenses are set by the market.

Question

Quizplus · Accepted Answer

This is because industries with cyclical products like lumber and copper are highly dependent on the market demand and supply dynamics. When inflation occurs, it affects both the buying power of the consumers and the cost of production, which can lead to changes in the market prices. Therefore, these industries are more sensitive to inflation-induced profits because they have limited control over pricing and expenses, which are determined by the market.

Industries with Cyclical Products Such as Lumber and Copper Are