The effects of inflation are less severe when the inflation is ________ inflation.
A) runaway
B) supply-side
C) anticipated
D) sedentary
E) accelerating

Question

Quizplus · Accepted Answer

Anticipated inflation refers to a situation where people are aware of expected inflation rates and adjust their expectations accordingly. In this case, wages, prices, and other economic variables are adjusted in response to inflation, which reduces the impact of inflation on the economy. In contrast, runaway and accelerating inflation can have severe effects on the economy, leading to hyperinflation, sharp declines in the value of money, and economic instability. Supply-side and sedentary are not relevant terms in this context.

The Effects of Inflation Are Less Severe When the Inflation