Question

2. Now people are living and working much longer than they used to in the developed world. This demographic changes might be one reason currently we have

a. low unemployment rate.

b. low unemployment rate.

c. high unemployment rate.

d. low output rate.

e. high inflation rate.

Answer 1

ANSWER (e) high inflation rate

Inflation affects different individuals differently. This can be as a result of the fall in the worth of money. Once value rises or the worth of cash falls, some groups of the society gain, some lose and a few stand in-between. Generally, there are 2 economic groups in each society, the fixed income group and the flexible income group.

People belonging to the primary cluster lose and those belonging to the second cluster gain. The rationale is that the worth movements within the case of various goods, services, assets, etc. are not uniform. Once there's inflation, most prices are rising, however the rates of increase of individual prices differ a lot of. Prices of some goods and services rise quicker, of others slowly and of still others stay unchanged.

There are 2 ways in which to measure the results of inflation on the distribution of income and wealth in a society. First, on the basis of the modification in the real price of such factor incomes as wages, salaries, rents, interest, dividends and profits.

Second, on the basis of the scale distribution of income over time as results of inflation, i.e. whether or not the incomes of the wealthy have increased and that of the middle and poor classes have declined with inflation.

The poor and middle categories suffer because their wages and salaries are a lot of or less fixed however the costs of commodities still rise. They become additional impoverished. On the other side, real estate holders, traders, industrialists, businessmen, speculators, and others with variable incomes gain during inflation.