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Question : In an inflationary situation, which of the following statements is false for a country?

Option 1: Profit rises faster than wages

Option 2: The value of money falls

Option 3: The cost of living rises

Option 4: The country's exports become more competitive


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: Profit rises faster than wages


Solution : The correct answer is Profit rises faster than wages .

When there is inflation, profits can increase faster than salaries. This is because firms may frequently pass on the expenses of inflation to customers in the form of increased pricing. Furthermore, corporations may be able to minimise expenses by laying off people or lowering pay.

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