During periods of inflation,which of the following events does NOT occur?
A) Mortgage lenders seek inflation adjustments.
B) Workers seek escalator clauses.
C) People on a fixed income have increased standards of living.
D) People on a fixed income have reduced standards of living.

Question

Quizplus · Accepted Answer

During periods of inflation, the value of money decreases, leading to an increase in the general price level of goods and services. As a result, people on a fixed income, such as retirees, have reduced standards of living because the purchasing power of their income decreases. Mortgage lenders and workers seek inflation adjustments to protect themselves from losses due to inflation. Therefore, choice C, "People on a fixed income have increased standards of living," does not occur during periods of inflation.

During Periods of Inflation,which of the Following Events Does NOT