The working capital requirement of a business thus, become with __ rate of inflation.

higher; higher

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higher; lower

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lower; higher

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lower; lower

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Solution

The correct option is B higher; higher
If there is increase or rise in price then the price of raw materials and cost of labour will rise, it will result in an increase in working capital requirement. The effect of rise in price on working capital will be different for different businessmen.
Therefore, working capital requirement becomes higher with higher inflation rate.

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The working capital requirement of a business thus, become ____ with ______ rate of inflation.

The working capital requirement of a business thus, become with __ rate of inflation.