GCE Economics 2024 Objective — Question 35
Question 35 of 50 from the General Certificate of Education (GCE) Economics 2024 Objective paper, with the correct answer and a full explanation.
Advertisement
One effect of inflation is that
- A. A. money's purchasing power will increase
- B. B. the real incomes of workers will rise
- C. C. both borrowers and lenders benefit from it
- D. D. money's purchasing power will fallCorrect
Explanation
Inflation is a persistent increase in the general price level of goods and services which occurs as a result of an increase in the supply of money without a corresponding increase in the production of goods and services. However, one of the major effects of inflation is that the purchasing power of money will fall.
Advertisement
Sign up free to unlock
- Score tracking
- Practice history
- Saved questions
- Progress dashboard
- Personalized sessions
- Weak-topic breakdown
…and/or go further with premium services and No Ads.