ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Teachers would lose their jobs.
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Students usually work for low wages.
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Many students would lose their jobs.
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School lunch costs would rise sharply.
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Detailed explanation-1: -Why might students be affected adversely by inflation? Teachers would lose their jobs. Students usually work for low wages. Many students would lose their jobs.
Detailed explanation-2: -Erodes Purchasing Power An overall rise in prices over time reduces the purchasing power of consumers, since a fixed amount of money will afford progressively less consumption. Consumers lose purchasing power whether inflation is running at 2% or at 4%; they just lose it twice as fast at the higher rate.
Detailed explanation-3: -Inflation is a measure of the rate of rising prices of goods and services in an economy. Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product.
Detailed explanation-4: -Less Purchasing Power The most obvious impact of inflation is that it hurts your purchasing power. If you can’t buy as many goods and services as you did before inflation, your quality of living will eventually diminish.
Detailed explanation-5: -Inflation will hurt those who keep cash savings and workers with fixed wages. Inflation will benefit those with large debts who, with rising prices, find it easier to pay back their debts. 20-Oct-2022