Inﬂation affects
A) both the level and the distribution of income.
B) neither the level nor the distribution of income.
C) the distribution, but not the level, of income.
D) the level, but not the distribution, of income.

Question

Quizplus · Accepted Answer

Inflation affects both the level and the distribution of income. It can erode purchasing power, impacting the overall level of income needed to maintain a certain standard of living. Additionally, inflation can affect the distribution of income by impacting different income groups differently, depending on factors like fixed incomes or the ability to adjust wages.

Inﬂation Affects