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WAEC Economics 2024 Question 35

Question 35

Money and Inflation

One effect of inflation is that

  1. A.money's purchasing power will increase.
  2. B.the real incomes of workers will rise.
  3. C.both borrowers and lenders benefit from it.
  4. D.money's purchasing power will fall.
Show the answer and explanation

Answer: D (money's purchasing power will fall.)

Explanation

Rising prices mean each unit of money buys less.