Inflation is undesirable because it:
A)arbitrarily redistributes real income and wealth
B)is always cumulative; that is, creeping inflation invariably causes high rates of inflation
C)reduces everyone's standard of living
D)is always accompanied by a declining real output
E)can lead to higher unemployment

Question

Quizplus · Accepted Answer

Inflation can lead to an arbitrary redistribution of income and wealth because the purchasing power of money decreases. Those who hold more assets are generally more protected from inflation than those with fewer assets, making it unfair.

Inflation Is Undesirable Because It