Which of the following is not a cost imposed by inflation?
A)Inflation reduces the affordability of goods and services to the average consumer.
B)The money that consumers and firms hold loses its purchasing power.
C)Firms must pay for changing prices on products and printing new catalogs.
D)Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.

Question

Quizplus · Accepted Answer

Inflation primarily affects the economy by reducing the purchasing power of money, leading to higher costs for changing prices and potentially impacting banks through interest rates. However, it does not directly reduce the affordability of goods and services to the average consumer in the sense of changing incomes or wealth; rather, it changes the value of money, which can indirectly affect affordability through decreased purchasing power.

Which of the Following Is Not a Cost Imposed by Inflation