Which of the following is a definite consequence of a high inflation rate?

a.It reduces everyone's real wealth and real income.

b.It can distort price signals.

c.It makes poor people worse off.

d.It makes borrowing more expensive.

Where the wage-setting curve and price-setting curve intersect,

a.Inflation is accelerating

b.The mark-up is zero.

c.There is deflation

d.The bargaining gap is zero.

Assume that a bargaining gap remains constant at 1 per cent. The rate of inflation in future years will:

a.Will be zero

b.Accelerate by 1 per cent per year.

c.Settle at 1 per cent.

d.Remain unchanged.