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5. Which of the following statements is correct about inflation? Choose the correct answer. A. It measures the general level of prices that consumers have

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5. Which of the following statements is correct about inflation? Choose the correct answer. A. It measures the general level of prices that consumers have to pay for goods and services, including consumption taxes. B. The level on inflation can be measured as the ratio between nominal and real GDP. C. When a country is experiencing high levels of inflation it means that the citizens are getting more value out of the money they have on hand. D. Inflation tends to be higher during periods of high unemployment 6. Tsepo and Thabo are both in the business of selling ice-cream on the beach front. During lock-down they both faced low levels of demand, which resulted in them closing up shop and as a result they both experienced low capacity utilization. The economy has now opened and they are reconsidering whether to reinvest in their businesses. The different investment choices and their payoffs are reflected in the payoff matric below. B's profit B Invests B does not invest 100 80 A Invests 100 -40 AS prom -40 10 A does not Invest 80 10 If Tsepo and Thabo are in a vicious cycle the outcomes of the game will be: A. Tsepo invests, Thabo does not invest B. Tsepo invests, Thabo invest C. Tsepo does not invest, Thabo does not invest D. Tsepo does not invest, Thabo invest

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