Which of the Following Statements Correctly Identifies a Reason Inflation

Multiple Choice

Which of the following statements correctly identifies a reason inflation can be used as a countercyclical policy tool?

A) Inflation reduces money costs and hence stimulates an economy during slowdowns.
B) Inflation increases consumer demand, which is necessary for combating slowdowns.
C) Inflation sometimes increases the demand for workers, which increases output and helps combat slowdowns.
D) Inflation increases consumer confidence, which is an absolute necessity to counter act business cycles.