QuestionAugust 2, 2025

Arbitrary redistribution of wealth would result from anticipated inflation nominal interest rate changes a freely fluctuating price system unanticipated inflation

Arbitrary redistribution of wealth would result from anticipated inflation nominal interest rate changes a freely fluctuating price system unanticipated inflation
Arbitrary redistribution of wealth would result from
anticipated inflation
nominal interest rate changes
a freely fluctuating price system
unanticipated inflation

Solution
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Answer

unanticipated inflation Explanation 1. Identify the concept of redistribution Redistribution of wealth occurs when there is a shift in purchasing power between different groups. 2. Analyze each option - **Anticipated inflation**: People can adjust contracts and wages, minimizing redistribution. - **Nominal interest rate changes**: These are often adjusted for expected inflation, so they don't directly cause redistribution. - **Freely fluctuating price system**: Prices adjust to supply and demand, not directly causing arbitrary redistribution. - **Unanticipated inflation**: This causes unexpected shifts in purchasing power, leading to arbitrary redistribution.

Explanation

1. Identify the concept of redistribution<br /> Redistribution of wealth occurs when there is a shift in purchasing power between different groups.<br /><br />2. Analyze each option<br /> - **Anticipated inflation**: People can adjust contracts and wages, minimizing redistribution.<br /> - **Nominal interest rate changes**: These are often adjusted for expected inflation, so they don't directly cause redistribution.<br /> - **Freely fluctuating price system**: Prices adjust to supply and demand, not directly causing arbitrary redistribution.<br /> - **Unanticipated inflation**: This causes unexpected shifts in purchasing power, leading to arbitrary redistribution.
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