Disinflation may cause
A) an increase in the value of gold, silver, and gems.
B) a reduced required return demanded by investors on financial assets.
C) additional profits through falling inventory costs.
D) None of the options are true

Question

Quizplus · Accepted Answer

Disinflation typically results in a decrease in the inflation rate, which can lead to a reduced required return demanded by investors on financial assets. This is because the expectations of future inflation are lower, reducing the need for a higher return to compensate for inflation. Option A is not necessarily true as the value of these commodities could be affected by many factors, and disinflation may not necessarily lead to an increase in their value. Option C may be true in some cases, but it depends on the specific situation and is not a guaranteed result of disinflation. Option D is not true as option B is correct.

Disinflation May Cause