During periods when the inflation rate fluctuates widely,
A)all relative prices increase at the same rate,leaving money prices constant
B)all money prices rise at the same rate,causing relative prices to increase
C)economic efficiency increases because decision makers pay closer attention to changes in money prices
D)uncertainty about changes in relative prices causes a decrease in economic efficiency
E)all money prices increase at the same rate,leaving relative prices constant

Question

Quizplus · Accepted Answer

Uncertainty about changes in relative prices during fluctuating inflation can lead to decreased economic efficiency as it complicates decision-making for consumers and businesses.

During Periods When the Inflation Rate Fluctuates Widely