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WAEC Economics 2001 Question 37

Question 37

Money and Inflation

One disadvantage of inflation is that

  1. A.fixed income earners gain.
  2. B.fixed income earners lose
  3. C.businessmen lose
  4. D.standard of living rises.
Show the answer and explanation

Answer: B (fixed income earners lose)

Explanation

When prices rise, a fixed income buys less, so fixed income earners lose.