Question

What is the effect of​ inflation? A. During periods of​ inflation, just about everyone can make themselves better off by specializing in their own profession rather than dabbling as amateur economists and inflation forecasters and managing their investment portfolios. B. With​ inflation, everyone loses. C. The increased uncertainty of inflation misallocates resources. D. During periods of​ inflation, investment rises and economic growth increases.

Answer 1

C. The increased uncertainty of inflation misallocates resources.

Step-by-step explanation:

Inflation is referred as the situation of the economy in which the prices of the goods and services gets increased to an alarming rate. The amount used to purchase those products fail to meet the purchasing power. The economy is effected drastically. Inflation creates a situation in which there arises an uncertainty regarding investment and savings. There arises situations in which the shortages of food and basic amenities are experienced during inflation.