Question

Which of the following is not a cost posed by inflation? Inflation reduces the affordability of goods and services to the average consumer. Firms must pay for changing prices on products and printing new catalogs. The money that consumers and firms hold loses its purchasing power. Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.

Answer 1

Inflation reduces the affordability of goods and services to the average consumer.

Step-by-step explanation:

Inflation is the persistent and generalized increase in the value of prices. When inflation reaches zero we say that there was a stability in prices.

When a country is experiencing a period of inflation there is uncertainty about the country's economy that forces the government to find alternatives to control inflation. One of the possible alternatives is to make it impossible for inflation to hinder the accessibility of goods and services to the average consumer

For this reason, the government invests in the productive capacity of the country, making the supply levels of the products and services always high, resulting in the reduction of the prices of these products. This is because more products available to consumers means increased supply, which results in falling prices.