If your income stays the same, and the price increases, this will fall.

Question

Advanced Placement (AP)

Yang

13 June, 15:25

If your income stays the same, and the price increases, this will fall.

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Justine Avila · Answer 1

If your income stays the same and the price increases (that represents the inflation) then the buying power of the people falls. The same amount of money that was needed for buying certain things before the prices go up is now not sufficient for buying those same things after the prices went up, thus the buying power of the people falls.