How did wartime inflation affect the real income of ordinary Indians?
Answer and explanation
Correct answer: The purchasing power of income decreased
The governing concept is real income, which depends on what money can actually buy rather than only on the number of rupees earned. During the First World War, prices of essential goods rose sharply because of wartime pressures and shortages, while ordinary earnings did not increase at the same rate. Thus, even if nominal wages remained unchanged, each rupee bought fewer goods. Option A is correct; the other options contradict the effects of inflation.
Frequently asked questions
What is the correct answer to this question?
The purchasing power of income decreased
Why is this the correct answer?
The governing concept is real income, which depends on what money can actually buy rather than only on the number of rupees earned. During the First World War, prices of essential goods rose sharply because of wartime pressures and shortages, while ordinary earnings did not increase at the same rate. Thus, even if nominal wages remained unchanged, each rupee bought fewer goods. Option A is correct; the other options contradict the effects of inflation.
Which subject and chapter does this question cover?
This is a Class 10 Social Science question. Chapter: Chapter 2: Nationalism in India. Topic: The First World War, Khilafat, and Non-Cooperation.
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