Question

a person generally spends $100 a month on groceries. I'd this years inflation rate is 5%, the person can expect to

Answer 1

The person can expect to spend additional 5% of its previous groceries spending of $100 which is $5. This condition happened because the commodity price expected to increase caused by the inflation resulting the value of money will be decreased at the same time. Therefore the person on the question can expect to spend $105 for his/her groceries spending.