As the average annual inflation rate ________,the volatility of inflation tends to ________.

Question

Quizplus · Accepted Answer

As the average annual inflation rate increases, the volatility of inflation also tends to increase. This is because higher inflation rates can lead to uncertainty and instability in the economy, causing prices to fluctuate more rapidly. Conversely, when inflation rates are lower and more stable, prices tend to be more predictable and less volatile.

As the Average Annual Inflation Rate ________,The Volatility of Inflation