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The rate of inflation in a country over four years is shown in the graph below - Junior Cycle Business Studies - Question 2 - 2017
Question 2
The rate of inflation in a country over four years is shown in the graph below. Rate of Inflation in a Country 2014 - 2017 Using the above information answer the f... show full transcript
Worked Solution & Example Answer:The rate of inflation in a country over four years is shown in the graph below - Junior Cycle Business Studies - Question 2 - 2017
Step 1
Step 2
State one way in which a large increase in the rate of inflation may affect consumers in an economy.
Answer
Increased inflation may discourage consumers from saving money, especially if the interest rate earned on savings is lower than the inflation rate. This situation may lead consumers to spend their money rather than save it, as the purchasing power of their savings diminishes.