Gwyn owns a furniture store. She notices prices at other furniture stores have increased dramatically over the past two years. She decides she needs to expand her output because demand must be growing. However, in order to do so, she needs to find a loan. What problems could inflation cause for Gwyn?
Gwyn might misinterpret rising prices associated with inflation for a higher demand.
Gwyn may need to spend money to update her price displays throughout the store.
Lenders may be wary of providing Gwyn a loan because it is difficult to predict future price levels.