Which of the Following Is Not an Effect of Inflation

question 175

Multiple Choice

Which of the following is not an effect of inflation that is troublesome to consumers?

• A)Household incomes may be rising slower than the overall prices.
• B)The purchasing power of people's savings would decrease.
• C)Workers' wages may be rising faster than the overall price level.
• D)Their standard of living would fall if their household has a fixed nominal income.

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Definitions:

Income Increase

A rise in the amount of money received, especially on a regular basis, through work, investments, or business.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, and vice versa.

Income Increase

A rise in the amount of money received, especially on a regular basis, through work, investments, or other sources.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded.