Question

Read the scenario. The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. Based on the scenario, who is most affected by the situation taking place within Country D?a. unemployment
b. inflation
c. high production
d. high wages

Answer 1

Answer:

b. inflation

Explanation:

Inflation is an increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices.It may be caused by an increase in the volumed of paper money issued or of gold mined,or a relative increase in expenditures as when the supply of goods fails to meet the demand. Inflation occurs when general level of prices and cost are rising.

As in the given scenario, the citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. Based on the scenario, inflation is most affected by the situation taking place within Country D.