Once consumers recognize that a period of inflation has begun, there is generally an increase in consumer spending. This increase can be readily explained by consumers' desire not to postpone purchases that will surely increase in price. But during protracted periods of inflation, consumers eventually begin to put off making even routine purchases, despite the fact that consumers continue to expect prices to rise and despite the fact that salaries also rise during inflationary periods. Which one of the following, if true, most helps to explain the apparent inconsistency in consumer behavior described above?
A: Consumers' purchasing power decreases during periods of protracted inflation since salaries do not keep pace with prices.
B: There is usually a lag between the leading economic indicators' first signaling the onset of an inflationary period and consumers' recognition of its onset.
C: If significant numbers of consumers are unable to make purchases, prices will eventually fall but salaries will not be directly affected.
D: No generalization that describes human behavior will be true of every type of human behavior.
Choose A, B, C or D as your solution.
A