For most people, the problems of inflation are caused by the fact that
A) the inflation is unanticipated.
B) the inflation is anticipated.
C) the inflation rate causes the purchasing power of money to increase.
D) all prices change so there is no way to protect themselves against the decline in their wealth.

Question

Quizplus · Accepted Answer

Unanticipated inflation causes problems for most people because they are not prepared for the negative effects it has on their purchasing power and standard of living. Anticipated inflation can often be factored into financial decisions and planned for, whereas unanticipated inflation can lead to uncertainty, market disruptions, and misallocation of resources. Option C is incorrect because inflation causes the purchasing power of money to decrease, not increase. Option D is incorrect because there are ways for individuals to protect against inflation, such as investing in assets that appreciate in value or adjusting their consumption habits.

For Most People, the Problems of Inflation Are Caused by the Fact