IBPS PO General Awareness: Inflation questions with solutions

Q1. Who is most affected by inflation?

1. High-income earners
2. Corporate investors
3. Poor, socially unprotected, and pensioners
4. Exporters

Answer: Poor, socially unprotected, and pensioners

Inflation reduces the purchasing power of money. Poor people, those without social security, and pensioners are hit hardest because their incomes are often fixed or insufficient to keep up with rising prices.

Q2. How is the inflationary trend over 2024 and 2025 expected to be driven, according to the passage?

1. Primarily by the manufacturing sector, due to increased production costs.
2. By a significant increase in energy prices, contributing to higher overall inflation rates.
3. Predominantly by the services sector, with wage growth expected to maintain inflation at elevated levels.
4. Through decreased consumer spending, leading to lower demand and thus lower inflation.

Answer: Predominantly by the services sector, with wage growth expected to maintain inflation at elevated levels.

The passage clearly states that inflation in 2024 and 2025 is expected to be driven predominantly by the services sector. It also mentions that wage growth in services will keep inflation elevated, while energy price contributions remain nominal.