In periods of high inflation,_____.
A)people want to hold as much money as possible
B)the purchasing power of money decreases
C)the real interest rate exceeds the nominal interest rate
D)the nominal interest rates are likely to be low
E)the nominal interest rate equals the real interest rate

Question

Quizplus · Accepted Answer

In periods of high inflation, the value of currency decreases, meaning that each unit of currency buys fewer goods and services. This is referred to as a decrease in the purchasing power of money.

In Periods of High Inflation,_____