Inflation:
A)can cause a redistribution of income from creditors to borrowers.
B)may discourage investment and economic growth.
C)can decrease the value of a nation's currency relative to other nations.
D)may result in any of the above.

Question

Inflation:
A)​can cause a redistribution of income from creditors to borrowers.
B)may discourage investment and economic growth.
C)​can decrease the value of a nation's currency relative to other nations.
D)​may result in any of the above.

Quizplus · Accepted Answer

Inflation can lead to a redistribution of income from creditors to borrowers, as the value of money decreases over time. It may also discourage investment and economic growth, as uncertainty about future prices makes it difficult to plan for the future. Additionally, inflation can decrease the value of a nation's currency relative to other nations, which can have negative effects on trade and international investments. Therefore, any of the above outcomes may result from inflation.