Financial Challenges | MCQs

Explanation

Inflation Defined:

Inflation is the sustained increase in general price levels, reducing purchasing power.

Impact on Pakistan:

Rising Costs: Essential goods (food, fuel) become more expensive, straining households.

Economic Strain: Businesses face higher input costs, leading to slower growth and unemployment.

Currency Depreciation: High inflation often weakens the rupee, worsening imports.

Explanation

In 2023, Pakistan faced a severe balance-of-payments crisis due to rising imports and low reserves.

This caused currency devaluation, inflation, and debt repayment issues—crippling the economy.