Question

Samuel is barely able to pay his bills on time. He lives paycheck to paycheck. He just barely manages to keep food on the table for his family and pay his rent to keep a roof over their heads. What effect would a sudden rise in inflation have on him? Explain.
A) he would find it easier to meet his family's basic needs and may even have extra income since everyday goods such as food would become cheaper

B) he would find it easier to meet his family's basic needs and may even have extra income since his rent would decrease

C) He would find it more difficult to meet his familys basic needs since his income level would decrease and would have less money to buy everyday goods such as food

D) he he would find it more difficult to meet his family's basic needs since everyday goods such as food become more expensive

Answer 1

The answer is D as inflation usually consists of the rise of price in goods and services. The salary is not decreased, however it is worth less as everything rises in cost and his salary stays the same.
Hope that helps!