NECO Economics 2024 Objective — Question 35
Question 35 of 50 from the National Examinations Council (NECO) Economics 2024 Objective paper, with the correct answer and a full explanation.
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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.
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