All of the following statements are true regarding inflation EXCEPT: O When infl

Question

All of the following statements are true regarding inflation EXCEPT: O When inflation expectations are high, investors will typically demand high interest rates on savings. O When inflation expectations are negative (i.e., deflation), borrowers will generally struggle to repay fixed interest loans O High inflations expectations encourage policy-makers to spend money on infrastructure sooner, rather than postponing expenses. O Low inflation expectations encourage construction companies to lock in supplier prices early. Save Answer How can you be profitable and go bankrupt at the same time?

Explanation / Answer

The answer is Low Inflation Expectations encourage construction comapnies to lock in supplier prices early.

When the Inflation expectations are low, the companies will not lock in the prices but will wait for low inflation

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