Which of the following statements about Andy is true if the inflation rate is increasing every year by 1 percent and there is no growth in his salary?
A) Andy can afford to buy more luxury items as prices go down.
B) Andy's purchasing power will decrease.
C) Andy's employment opportunities will increase.
D) The lack of growth in Andy's salary will increase the average inflation rate .
E) Andy's cost of borrowing will be reduced.

Question

Quizplus · Accepted Answer

If the inflation rate is increasing every year by 1 percent and there is no growth in Andy's salary, his purchasing power will decrease. This means that the same amount of money will buy him fewer goods and services over time.

Which of the Following Statements About Andy Is True If