New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    What can be the possible impact of Inflation on

    Purchasing Power of Money?
    A It reduces Correct Answer Incorrect Answer
    B It increases Correct Answer Incorrect Answer
    C It remains the same Correct Answer Incorrect Answer
    D It can both reduce or increase Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Purchasing power measures what a unit of currency can buy, while inflation measures rising prices. As inflation rises, purchasing power falls because one needs more units of currency to acquire the same basket of goods.

    Practice Next

    Relevant for Exams: