Which of the following is/are the effect(s) of inflationary trends in an economy?
1. In short term, it leads to unemployment.
2. Nominal growth in an economy decreases.
3. The cost of borrowing increases.
Select the correct answer using the code given below:
1 only
1 and 2 only
1 and 3 only
1, 2 and 3
• Inflationary trends lead to unemployment in the short term, in order to offset the high cost of factors of production.
• Nominal growth is not adjusted for inflation and, thus, is said to increase during high inflation.
• Inflation is good for those who borrow, as the nominal interest is offset by high inflation, resulting in low cost of borrowing.
The term 'West Texas Intermediate', sometimes found in news, refers to a grade of
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