A hardware company named Ace Works Corp. has been going through financial problems because the entire industry experienced a drastic rise in prices. This has made it hard for the company to plan any future investments as it cannot risk the chance of losing more funds. Rather than development, most of the companies in this industry are experiencing an increase in price competition because all of them are competing with each other to gain more market share. Which of the following general economic conditions is Ace Works Corp. experiencing?
A)Inflation
B)Low interest rate
C)Low currency exchange rate
D)Economic growth

Question

Quizplus · Accepted Answer

The rise in prices in the industry indicates inflation, which is a general economic condition where there is a sustained increase in the overall price level of goods and services in an economy over a period of time. This makes it harder for companies like Ace Works Corp. to plan for future investments and remain profitable in the long run. Additionally, the increased price competition among the companies also suggests that they are trying to maintain their market share, which is a common response to inflationary pressures in the economy.

A Hardware Company Named Ace Works Corp