You receive a raise of 3% at work.The rate of inflation is reported to be 5%.
A)Your purchasing power has decreased 2%.
B)Your purchasing power has increased 2%.
C)Your purchasing power remains the same.
D)Your purchasing power is not a variable and therefore is not affected.

Question

Quizplus · Accepted Answer

The raise of 3% is less than the reported inflation rate of 5%, meaning that the cost of goods and services has increased by more than your salary. You can now purchase 2% less than you could before the raise due to inflation.

You Receive a Raise of 3% at Work