Describe the output effects of Inflation

Question

Describe the output effects of Inflation?

Answer 1

A. Cost-push inflation, where resource prices increases suddenly, it would cause both output as well as employment to decline.  Real income falls.

B. Mild inflation comprises uncertain property.  It may be a vigorous derivative of a prosperous economy, or it may have an adverse collision on real income.

C. Danger of creeping inflation turning into hyperinflation, which can cause speculation, reckless spending, and more inflation.