Why would an individual increase his level of consumption during inflationary periods?
-
The real value of any amount saved falls over time
- Interest rates are generally low
- There are varieties of goods to buy
- Wages and salaries stagnate during inflation
The correct answer is: A
Explanation
Because during inflation, much money is used to buy few goods. The value of money drops and the need to satisfy an individual's want rises. Money spent in buying basic goods increase.