Answer to Question #218360 in Economics for Andie

Question

4.1     Which of the following statements regarding the effects of inflation is/are correct?

 

 a)       Inflation stimulates speculative practices that do not add to the country’s productive

capacity.

b)       Inflation tends to benefit the government.

c)        Inflation is often regarded as public enemy number one.

 

 [1]     a and b

[2]     b and c

[3]     a and c

[4]     b

[5]     All the statements are correct.

Answer 1

The following statements regarding the effects of inflation are correct:

(a) Inflation stimulates speculative practices that do not add to the country’s productive

capacity.

(c) Inflation is often regarded as public enemy number one.

Therefore, the correct answer is [3]  a and c.