Question

Based on the scenario, who is most affected by the situation taking place within Country D? the government of Country D the workers of Country D the businesses of Country D the government, workers, and businesses of Country D

Answer 1

Answer:

the government, workers, and businesses of Country D

Explanation:

This reading describes a high inflation scenario where the general prices of goods and services is increasing more rapidly than household income. The problem with high inflation is that it reduces overall demand, which in turn lowers the entire GDP since consumption is by far the largest component of the GDP (in every single country, including D).

Once consumption starts to fall, a domino effect takes place and the businesses are negatively affected, and they are forced to lay off workers, and the government is also affected because their revenue decreases and their spending increases.