Question

The year 2018 shows an increase in inflation rate in India as compared to 2017.
What happens when inflation gets higher?

Answer 1

Answer:

if inflation increases then cost of raw materials increases.

Answer 2

Answer:

Inflation reduces the purchasing power of the currency.

Explanation:

Inflation corresponds to the increase in the cost of commodities.

Some of the effects of high inflation are as follows

• It decreases the purchasing power of money.
• The richer section of society starts investing.
• The poorer section starts burrowing money.
• Job openings become scarce.
• It can lead to unemployment.
• The price of almost everything rises.