Question

The impact of inflation places ______________ and risk in the savings and borrowing relationships.

Answer 1

Answer:

The correct answer is the option C: uncertainty (the possibility that benefits may be less than expected).

Explanation:

To begin with, the concept of inflation refers to the sustained increase in the general price level of goods and services produced inside an economy and therefore consequently a reduction in the purchasing power per unit of money.

Secondly, it is understandable that the inflation causes that the uncertainess and riskness both take places in the saving and borrowing relationships due to the fact that the price that products and services will have in the future are not determinated and will probably increase in an unexpected way and therefore causing that benefits may be less than expected as well too.