Economic Awareness - Sectors of Indian Economy
Why are fixed income earners particularly vulnerable during periods of high inflation?
Why are fixed income earners particularly vulnerable during periods of high inflation?
easy Q1 of 15
Step-by-Step Solution
Step 1: Understand fixed income
Fixed income earners receive a constant nominal income.Step 2: Apply inflation impact
When prices rise due to inflation and income remains unchanged, purchasing power falls.Final Answer:
Their income remains constant while prices rise → Option BQuick Check:
Fixed income + rising prices = loss of purchasing power ✅
Quick Trick: No indexation = real income loss
Common Mistakes:
- Thinking nominal income must fall for loss to occur
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