Question

Assertion (A): Mr. Gupta earns a fixed income every month, but he tends to get adversely affected during inflation.

Reason (R): The prices of goods, services and the cost of living, does not rise in the same proportion as income, during inflation.

Options

• Both (A) and (R) are true and (R) is the correct explanation of (A).

• Both (A) and (R) are true but (R) is not the correct explanation of (A).

• Both (A) and (R) are false.

• (A) is false and (R) is true.

Answer 1

Both (A) and (R) are true and (R) is the correct explanation of (A).

Explanation:

Inflation causes prices of goods and services to rise, while incomes, especially fixed incomes, do not always increase at the same pace.