Asked by Jordan Edmundson on May 25, 2024
Verified
When inflation rises, people make
A) less frequent trips to the bank and firms make less frequent price changes.
B) less frequent trips to the bank while firms make more frequent price changes.
C) more frequent trips to the bank while firms make less frequent price changes.
D) more frequent trips to the bank and firms make more frequent price changes.
Inflation
The speed at which overall prices for products and services increase, leading to a decline in buying power.
Price Changes
Adjustments in the cost of goods and services in the market, often influenced by factors like supply and demand, inflation, and government policies.
- Determine and describe the financial burdens inflation imposes, including shoeleather expenses and menu expenses.
- Comprehend the function of central banks in regulating inflation and controlling the money supply.
Verified Answer
AH
Ahmed HeshamMay 26, 2024
Final Answer :
D
Explanation :
When inflation rises, individuals often need to withdraw money more frequently to keep up with increasing prices, and firms adjust prices more frequently to maintain their profit margins and keep pace with the cost of inputs.
Learning Objectives
- Determine and describe the financial burdens inflation imposes, including shoeleather expenses and menu expenses.
- Comprehend the function of central banks in regulating inflation and controlling the money supply.