Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It generally increases purchasing power.
B
It usually has no effect on the standard of living.
C
It often decreases purchasing power due to rising prices.
D
It leads to higher employment rates.
Understanding the Answer
Let's break down why this is correct
Answer
Inflation is when prices for goods and services rise over time, which means that the money people earn can buy less than before. For employed individuals, this often leads to a decrease in their standard of living because their wages may not keep up with rising prices. For example, if someone earns $50,000 a year and inflation causes prices to increase by 3%, their salary might not increase at the same rate, making things like food, gas, and rent more expensive. As a result, they may find it harder to afford the same lifestyle or necessities they could before. This situation can lead to financial stress and a feeling of being less secure, even if they still have a job.
Detailed Explanation
Inflation means prices go up. Other options are incorrect because Some might think inflation helps people buy more; It's a common belief that inflation has no effect.
Key Concepts
Employment
Topic
Inflation and Standard of Living
Difficulty
easy level question
Cognitive Level
understand
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