Suppose a family's income increases by 5% at the same time that inflation is 6%. Then the family's living standard:
A) Will increase by 5%
B) Will not change
C) Will increase by 1%
D) Will decrease

Question

Quizplus · Accepted Answer

Since inflation is greater than the increase in income, the purchasing power of the family's income actually decreases, resulting in a decrease in their living standard.

Suppose a Family's Income Increases by 5% at the Same