Inflation might lead to ________ because ________.
A)higher demand for stocks;as the price level increases so do stock prices
B)higher production costs;businesses have to advertise more often due to faster price revisions
C)lower transaction costs;we would hold less cash
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Inflation leads to higher production costs for businesses, which can result in the need for more frequent advertising and marketing efforts. This is because as prices increase, businesses may need to spend more money to maintain their profitability and competitiveness. Higher prices can also lead to reduced consumer purchasing power, which can ultimately dampen demand for stocks and other investments. However, the idea that inflation would lead to lower transaction costs or higher demand for stocks is not necessarily accurate.

Inflation Might Lead to ________ Because ________

Inflation Might Lead to Because