what are the signs of high inflation? check all that apply. production begins to fall. production begins to…
what are the signs of high inflation? check all that apply. production begins to fall. production begins to rise. interest rates decrease. interest rates increase. purchasing power falls. fewer fixed rate bank loans.
Answer
Brief Explanations:
High - inflation often leads to uncertainty. Producers may cut back on production due to cost and demand uncertainties, so production may fall. Lenders demand higher interest rates to compensate for the loss of value of money over time, so interest rates increase. As prices rise, the same amount of money can buy fewer goods and services, so purchasing power falls. With high inflation expectations, banks may offer fewer fixed - rate loans to avoid losing out on future higher interest rates.
Answer:
Production begins to fall. Interest rates increase. Purchasing power falls. Fewer fixed rate bank loans.