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Category - Economics

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One of the consequences of unanticipated inflation is:
  1. distribution of income from owners to investors
  2. distribution of income from employees to employers
  3. job losses
  4. job gains
Explanation
Answer: C - One of the consequences of unanticipated inflation is job losses.

Key Takeaway: Unanticipated inflation occurs when inflation is not factored into business decision making. One of the consequences of this is wage settlements that are higher due to inflation which is transferred to employers. Employers, in turn, would cut jobs in order to reduce costs.
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