Unpredictable inflation can cause businesses to:
A) have a hard time planning future production.
B) cease production until they know how to adjust for inflation.
C) restrict output and stockpile inventory.
D) increase production due to expecting future price level changes.

Question

Quizplus · Accepted Answer

Unpredictable inflation makes it challenging for businesses to accurately plan for future production and prices, as they cannot anticipate the rate of inflation. This uncertainty can lead to inefficiencies in production and pricing decisions, causing businesses to struggle. Ceasing production is unlikely, and stockpiling inventory or increasing production are also unlikely reactions to unpredictable inflation.

Unpredictable Inflation Can Cause Businesses To