Question

Unanticipated inflation can cause all of the following EXCEPT A) production of goods and services decreases. B) government gains tax revenue from income increases. C) debtors repay creditors with dollars that are worth less. D) fixed incomes increase more rapidly than the price level.

Answer 1

its D, because inflation does not incomes to increase more rapidly than the price level.

Answer 2

Anticipated inflation over a long period of time can have a great effect on investments. Anticipating the exact rate of inflation can never be measured exactly. The effects of unanticipated inflation are not good for the debtor – creditor relation and rationing functioning of prices.

Question: Unanticipated inflation can cause all of the following EXCEPT

Answer: D) fixed incomes increase more rapidly than the price level.