20. identify two groups of people in an economy who may lose when there is price
ID: 1166647 • Letter: 2
Question
20. identify two groups of people in an economy who may lose when there is price inflation.
Briefly explain your reasoning. in 50 words
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Explanation / Answer
Thre are two group of people in the economy says, A daily or fixed wage earner and the and the second group of economy is the bussiness men or the salers. Now when there is inlation occour in the economy the price of the commodity will increase as well as the market cost. on the other hand, even if the price of the commodity will increase the group of people who are daily or fixed wage eaerner will remain their wage unchange, and because of the inflation in the economy meaning increase in price, this will leads to decrease the real wage rate of the daily wage earner and it effect the daily consumptions of the low wage earner.
on the other hand when there is increase in price or the inflation, the business man will effected which means as the price increases the buyers will not encourage to buy more, thus this will leads to effect the profit maxmisation of the sellers.
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