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Answered

Nelly's grandparents are on a fixed income. Which of the following is true?

Inflation does not affect their purchasing power.

Inflation causes their purchasing power to go up.

Inflation causes their purchasing power to go down.

Verified Answer :

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With Nelly's grandparents being on a fixed income, inflation will cause their purchasing power to go down. Since inflation causes prices to raise, they will not be able to purchases things like before. The correct answer is C.

Answer:

Inflation causes their purchasing power to go down.

Explanation:

Inflation refers to the increase of the prices of products and services in the economy in a specific period. When the prices increase, the purchasing power people have decreases which means that they can buy less products and services. So, as Nelly's grandparents have a fixed income which means that the amount doesn't change, inflation which reflects the rise of the prices causes their purchasing power to go down as they are not able to buy the same quantity of products.

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