What are the costs associated with inflation?

What will be an ideal response?

Inflation can redistribute income between those who can raise their prices and wages and those who are unable to do so. Individuals on fixed incomes from pensions or investments will be worse off if these sources of income do not increase with the inflation rate. Borrowers gain and lenders lose with inflation because the payments on loans such as home mortgages, may not increase with inflation. Inflation results in uncertainty about what the real purchasing power of money will be in the future. Inflation also creates difficulties in contracts for future payments, and high inflation may undermine the faith in governments and economic systems entirely.

Economics

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In the short run, marginal cost is increasing when

A) MPL is decreasing. B) MPL is increasing. C) APL is increasing. D) APL is decreasing.

Economics

What is one reason drunk driving is held in such disrepute?

A) Drunk driving imposes high potential costs on non-drunk drivers. B) Drunk driving destroys cars and telephone poles, causing disruption in essential services. C) Only drunk drivers cause automobile fatalities. D) Drunk drivers impose high potential costs on other drunk drivers.

Economics