Question

Suppose a family's income increases by 5 percent at the same time that inflation is 6 percent. Then the family's living standard

Answer 1

Answer:

When the currency supply is inflated it basically makes the currency worth less thus poeple's money loses adquisition power, if the family's income goes to 5% but inflation goes to 6% then logically inflation is making the family's currency value drop 1 point, meaning the family will adquire less things due goods & services become more expensive, therefore (c), their living standard unfortunately will decrease.