Which of the Following Statements About Unanticipated Inflation Is True

Multiple Choice

Which of the following statements about unanticipated inflation is true?

A) It reduces average purchasing power in the economy.
B) It reduces total purchasing power in the economy.
C) It redistributes purchasing power in the economy.
D) It reduces nominal wages.
E) Its effects are spread evenly throughout the economy so that no one gains or loses from inflation.