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  3. In addition to redistributing incomes, inflation may affect the total real income and production of the community. An increase i

In addition to redistributing incomes, inflation may affect the total real income and production of the community. An increase i

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问题     In addition to redistributing incomes, inflation may affect the total real income and production of the community. An increase in prices is usually associated with high employment. In moderate inflation, industries are operating efficiently and output is near capacity. There is a great deal of private investment and jobs are plentiful, Such has been the historical pattern. Thus, many business persons and union leaders, in evaluating a little deflation and a little inflation, consider the latter to be the lesser of two evils. In mild inflation, the losses to fixed-income groups are usually less than the gains to the rest of the community. Even workers with relatively fixed wages are often better off because of improved employment opportunities and greater take-home pay, a rise in interest rates on new securities may partly compensate for any losses to creditor, and increases in pension benefits may partly make up losses to retirees.
    In deflation, on the other hand, the growing unemployment of labor and capital causes the community’s total well-being to be less; so in a sense, the gainers get less than the losers lose. As a matter of fact, in a depression, or a time of severe deflation, almost everyone suffers, including the creditor who is left with uncollectable debts.
    For these reasons as increase in consumption of investment spending is considered good in times ’of unemployment, even if this tends to increase prices slightly. When the economic system is suffering from severe depression, few people will criticize private’ or public spending on the ground that this might be inflationary. Actually, most of this increased spending will increase production and create jobs. Once, lull employment and full plant capacity have been reached, however, any further increases in spending are likely to be completely wasted in price increase.
Which of the following happens if there is a mild inflation?
选项 A、Everyone loses because of the increase of prices.
B、Retired people don’t experience any influence.
C、Creditor gain rather than lose with a rise in interest rates.
D、Some people gain more while others lose.
答案D
解析 根据文章第一段中所述：In mild inflation，the losses to fixed-income groups are usually less than the gains to the rest of the community.
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