Question

PLEASE HELP ASAP!! CORRECT ANSWER ONLY PLEASE!!!

Which statement describes the effect of inflation on purchasing power?

A. As the rate of inflation remains constant, purchasing power increases.

B. As the rate of inflation remains constant, purchasing power stays the same.

C. As the rate of inflation increases, purchasing power increases.

D. As the rate of inflation increases, purchasing power decreases.

Answer 1

D. As the rate of inflation increases, purchasing power decreases.

Step-by-step explanation:

Purchasing power decreases because the value of a dollar means less. So now instead of being able to get a drink for a dollar, you will need 2 dollars because the dollar has less value

Answer 2

D

Step-by-step explanation:

So, lets go over what inflation and purchasing power mean.

Inflation is the increase in money of something.

Purchasing power is a persons ability of pruchasing something.

Now, heres an example. A 300 dollar apple phone was quickly being purchased, and apple infalted the price to 600 dollars. Since people can only afford to purchase so much, some might not be able to afford this. This means not as many people can purchase it.

Since the price was raised, this measn the inflaction was increased.

Since the amount of people that could afford the apple phone shrunk, the purchasing power decreased.

So basically, to summarize this:

As the infaltion of an item is increased, the purchasing power is decreased, for less people can afford the higher price.

Answer:

D - As the rate of inflation increases, purchasing power decreases.

Hope this helps!