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How will higher inflation affect the number of vehicles the

Effects of Inflation

The General Manager (GM) of a car dealership is working on a three year business plan. The GM expects inflation to rise over the next three years.

• How will higher inflation affect the number of vehicles the dealership can sell?

• Based on the GM's inflation expectation what type of loan should the dealership arrange with its bank in order finance its inventory of automobiles?

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