If an individual is living in a period of continued high inflation on a fixed income, then:
A)the cost of the goods and services he or she buys decreases and his or her real income increases.
B)the cost of the goods and services he or she buys increases and his or her real income increases.
C)the cost of the goods and services he or she buys increases, but his or her real income remains the same.
D)the cost of the goods and services he or she buys increases and his or her real income decreases.
E)the cost of the goods and services he or she buys decreases and his or her real income remains the same.

Question

Quizplus · Accepted Answer

In a period of continued high inflation, the cost of goods and services will increase over time. If an individual is on a fixed income, their income remains the same, while the cost of goods and services they need to purchase increases. This means that their purchasing power decreases, resulting in a decrease in real income. Therefore, the best choice is D.

If an Individual Is Living in a Period of Continued