What is a consequence of high inflation during a boom period?

High inflation during a boom period typically leads to rapid increases in prices. This phenomenon occurs because, during a boom, demand for goods and services often outpaces supply, driving prices higher. When consumers and businesses are optimistic about the economy and spending increases, it can create upward pressure on prices. This environment can lead to inflationary spirals where the prices of essential goods, wages, and services rise quickly as businesses try to keep up with the heightened demand.

Stable prices for consumers would not be the case during high inflation; instead, individuals find it increasingly difficult to manage their budgets as prices rise. Similarly, increased purchasing power is counterintuitive in an inflationary environment, as the value of money decreases, thus reducing the ability of consumers to buy as much as they could before the price increases. Decreased investment opportunities can occur, but this is more commonly a result of other economic conditions rather than being a direct consequence of high inflation during a boom. Therefore, rapid increases in prices is the most accurate consequence in this context.