13. How does inflation affect people's standards of living and savings? Inflation is an (increase, decrease ) in the overall level of prices and has a ( positive , negative ) effect on people's standards of living and savings. People are forced to reduce their expenditures when the price of goods and services increases while nominal wages (also known as salaries) do not change. Savings are also affected by inflation because the (R saved dollars is reduced. For example, a family with saving of $60,000 will be able to purchase (, more, fewer ) goods and services with those dollars if the economy is experiencing inflation. ) of
13. How does inflation affect people's standards of living and savings? Inflation is an (increase, decrease ) in the overall level of prices and has a ( positive , negative ) effect on people's standards of living and savings. People are forced to reduce their expenditures when the price of goods and services increases while nominal wages (also known as salaries) do not change. Savings are also affected by inflation because the (R saved dollars is reduced. For example, a family with saving of $60,000 will be able to purchase (, more, fewer ) goods and services with those dollars if the economy is experiencing inflation. ) of
Chapter1: Making Economics Decisions
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