Uncertainty about inflation:
A)shifts the attention of business managers away from exchange rate movements and toward concerns about productivity.
B)reduces the difficulty of making international business decisions.
C)make suppliers link the selling prices of their goods to the overall inflation rate.
D)undermines money's importance as a link between the present and the future.
E)makes contracts easier to negotiate.

Question

Quizplus · Accepted Answer

Uncertainty about inflation undermines the importance of money as a reliable link between the present and the future, as people are unsure about the value of money over time. This can make financial planning and decision-making difficult, which is not ideal for business managers. A, B, and C are not accurate statements about the impact of inflation uncertainty on business decisions. E is also inaccurate as higher inflation rates can make contract negotiations more difficult if there is uncertainty about future costs.

Uncertainty About Inflation