When inflation functions as a type of tax,which of the following groups of people will be hurt the most?
A) people or businesses with deposits in a savings account that pays an interest rate higher than the rate of inflation
B) people or businesses that invest in gold,silver,platinum,or other metals
C) people who hold currency and coins in their wallet,purse,or at home
D) people who invest their money in mutual funds

Question

Quizplus · Accepted Answer

People who hold currency and coins in their wallet, purse, or at home will be hurt the most because the value of their money will decrease as inflation increases, resulting in a loss of purchasing power. The other options provide some protection against inflation. People or businesses with deposits in a savings account that pays an interest rate higher than the rate of inflation can earn a return on their money. People or businesses that invest in gold, silver, platinum, or other metals can benefit from the metals' intrinsic value and protection against currency devaluation. People who invest their money in mutual funds can diversify their portfolio and potentially earn higher returns than inflation.

When Inflation Functions as a Type of Tax,which of the Following