Which of the following is a likely cause of increased prices for products, decreased purchasing power, and decreased profit margins?
A) Low unemployment
B) Stagnant wages
C) Declining living standards
D) Cyclical inflation
E) Limited credit
Answer: A
Explanation: A) Potential results of low unemployment include increased prices, decreased purchasing power, and decreased profits. Although consumers have more money to inject into the economy, this increase is soon undone by higher prices, so purchasing power declines.
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