Which of the Following Is True of High and Variable

Multiple Choice

Which of the following is true of high and variable rates of inflation?

A) When such rates are present, it will be difficult for people to accurately forecast next year's rate of inflation.
B) Inflation of this type will help promote economic growth and the efficient use of resources.
C) People will respond to such rates by spending more time producing and less time trying to protect their wealth and income from the uncertainty created by the inflation.
D) Inflation of this type will improve the information content delivered by market prices.