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Inflation & Productivityeconomics-mcqs › inflation-productivity
Published
1 Jun 2019
Last updated
28 May 2026

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Which factor can counterbalance the impact of inflation on a nation's product price competitiveness?

Multiple choice question for Inflation & Productivity. Select an option, then review the explanation below.

Choose the correct answer

Explanation

Inflation tends to make a country's goods more expensive, reducing competitiveness. However, if other countries experience lower inflation, it can offset this effect by keeping their prices from rising as quickly, thus balancing competitiveness. Currency appreciation, revaluation, or depreciation affect exchange rates but do not directly offset inflation's impact in this context.

Practice related questions from the same subject.

  1. 1.According to the Phillips curve theory, when does unemployment revert to its natural rate?
  2. 2.What do menu costs signify in the context of inflation?
  3. 3.What is the effect of a rise in production costs on the economy?
  4. 4.What is the likely effect on the economy when injections into it increase?
  5. 5.Which of the following can trigger demand-pull inflation?

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