Asked by Deepak Karira on Jul 25, 2024
Verified
Inflation is costly only if it is unanticipated.
Inflation
The velocity at which the aggregate price level for goods and services elevates, thereby reducing purchasing capability.
- Differentiate between anticipated and unanticipated inflation and their respective costs.
Verified Answer
KH
Karan HindujaJul 27, 2024
Final Answer :
False
Explanation :
Inflation, whether anticipated or unanticipated, can be costly. Anticipated inflation can lead to resources being used for inflation protection rather than productive investments, while unanticipated inflation can distort price signals and redistribute wealth unpredictably.
Learning Objectives
- Differentiate between anticipated and unanticipated inflation and their respective costs.