For individuals who are holding money or fixed dollar value assets,what is the effect of inflation?
A)It increases the purchasing power of those dollars.
B)It improves their ability to purchase goods and services with those dollars.
C)It reduces their ability to purchase goods and services with those dollars.
D)It does not change the purchasing power of those dollars.

Question

Quizplus · Accepted Answer

Inflation reduces the value of money over time, so individuals who are holding money or fixed dollar value assets will have a reduced ability to purchase goods and services with those dollars as prices increase.

For Individuals Who Are Holding Money or Fixed Dollar Value