Quizzol

QUESTION:

Which of the following statements about inflation is not true?

a. An increase in inflation increases nominal interest rates.

b. If there is inflation, taxing nominal interest income reduces the return to saving and reduces the rate of economic growth.

c. Inflation reduces people's real purchasing power because it raises the cost of the things people buy.

d. Unanticipated inflation redistributes wealth.

ANSWER:

c. Inflation reduces people's real purchasing power because it raises the cost of the things people buy.

Posted by Cleveland on September 10, 2024