Question

he country Grupindor recently experienced a drastic increase in inflation. This led to the depreciation in the value of its currency and affected trade and business drastically. In the context of the general environment, this scenario best illustrates the effect of the _____ on organizations.

Answer 1

Answer:

The correct answer is economy of the nation.

Explanation:

Inflation has a consequence in companies, but we can say that it can cause an initial increase in benefits since wages and other costs are modified based on price variations, that is, they are altered once prices They have varied.

This results in increases in dividend payments, interest and capital investment. In addition, many people can increase their spending with the feeling that buying later can be more expensive. But this is the first initial action in some cases.

In this way, inflation at the national level can lead to an improvement in the trade balance if the same amount of goods can be sold but at higher prices. Even in spite of this, it is a value that distorts normal economic activity, since on the other hand it reduces the purchasing power of people and can lead to a reduction in consumption since you can not buy more.