How might low inflation levels in the general economy affect a company like McDonald's?
A) McDonald's will pay much higher prices for supplies and will charge customers more for its products.
B) McDonald's will pay higher prices for supplies and will charge customers more for its products.
C) McDonald's will pay relatively constant prices for supplies, but will be unable to increase the price paid by customers.
D) McDonald's will pay relatively constant prices for supplies and will charge customers more for its products.
E) McDonald's will pay higher prices for supplies, but will be unable to increase the price paid by customers.

Question

Quizplus · Accepted Answer

Low inflation means that the general level of prices in the economy is increasing very slowly. This would likely result in McDonald's paying relatively constant prices for its supplies. However, because the overall price level is stable, it might be challenging for McDonald's to increase the prices of its products without risking a loss of customers to competitors.

How Might Low Inflation Levels in the General Economy Affect