Inflation decreases the purchasing power of money.

Question

Quizplus · Accepted Answer

Inflation is the increase in the general price level of goods and services in an economy. As the price of goods and services increase, the purchasing power of the currency decreases, meaning that each unit of currency can buy fewer goods or services. This reduces the value of savings and salaries, making it more difficult for people to purchase goods and services that they need. Therefore, inflation decreases the purchasing power of money.

Inflation Decreases the Purchasing Power of Money