Question

16. (05.06 MC)

If the inflation rate increases faster than their income, people will most likely (5 points)
use a higher proportion of their incomes on basic needs
spend a lower proportion of their incomes on basic needs
get more goods and services for less money

Answer 1

A - use a greater porportion of their income on basic needs

Step-by-step explanation:

So, inflation is basically the increase in the cost of something.

So, if inflation rate increases, things will cost more money.

If people's income is smaller than this amount of money, then more people are going to spend that income on the resources and basic needs for survival, instead of on things that are not needed.

In the end, people are going to be spending more money of basic needs, not less, since it cost more.

Hope this helps! :)