Answer to Question #95418 in Macroeconomics for Sumana

Question

A survey was conducted in 2011 to find the distribution of income levels of the people. It was repeated in 2019. What would be the change in the results if we take into account the effect of inflation.

Answer 1

Survey shows that there has been a decrease in inflation from 2011 to 2019. inflation in 2011 was 3.16% while in 2019 is 1.75% . Decrease in inflation rate leads to unemployment and depression among people. When business make less money they tend to cut costs by laying off employees to ensure their survival in the market. People are forced to reduce their spending thus resulting to low income distribution.