Question

It is often said that high rates of inflation tend to diminish people's incentive to save and invest. this view must be incorrect, however, because people generally saved and invested more of their income in the 1970's when inflation rates were high than they did in the 1980's when inflation rates were low.

Answer 1

Of the following, the best criticism of the argument above is that it overlooks the possibility that certain factors operating in the 1980’s but not in the 1970’s diminished people’s incentive to save and invest.
If these other factors, unrelated to the inflation rate, that operated in the 1980’s but not the 1970’s, created an even greater disincentive to savings and investment than high inflation rates provide, then those trends do not provide evidence about the general relationship among savings, investment, and inflation.