The rate of inflation -

Understanding the Rate of Inflation

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Question

The rate of inflation -

Answers

A. has been found to vary inversely with the aggregate profit margin.

B. has been found to vary positively with the aggregate profit margin.

C. has an unresolved affect on aggregate profit margin.

D. has been found not to affect aggregate profit margin. C

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Explanations

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A. B. C. D.

Explanation

Finkel and Tuttle found that the capacity utilization rate, unit labor costs, rate of inflation, and foreign competition were the four major variables that affected the aggregate profit margin. They postulated that the rate of inflation was positively related to profit, while others have postulated the opposite.

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