Question

What is the main problem for people on a fixed income during a period of chronic inflation?

A. Their income will not increase, so their purchasing power falls.
B. They have to ask for an increase in wages to match inflation.
C. Their investments will not pay as much interest.
D. They have to wait for the government to react to the crisis.

Answer 1

The correct answer is A.) Their income will not increase, so their purchasing power falls.

Answer 2

Answer: Their income will not increase, so their purchasing power falls.

Naturally, a fixed income will not be given any amount of raise especially in a widespread inflation crisis thus people earning in fixed income suffer. When there is chronic inflation and the people's wage remains the same, people will not be able to buy supplies that will sustain their daily needs.