Question

Which of the following could be an outcome of unexpected inflation?

Export goods decrease.
Foreign goods cost less.
Worker education increases.
Workers have more purchasing power.

Answer 1

Answer: A. Export goods decrease.

Explanation: There is a difference between anticipated and unanticipated inflation, which typical occurs because of an unexpected event such as a pandemic or natural disaster. Because of this unexpected event, there is an increase for the demand for goods and services locally beyond what the producers can make and export overseas.

For example, during the Covid-19 pandemic, there was an increased demand for toiletries such as tissues that would help with the symptoms of the virus and resulted in a cap of the amount of boxes a consumer could purchase. Companies not only had to increase production to meet the demands, but had to reduce their amount of product being exported.