The rate of inflation and the purchasing power of money are
A) positively related.
B) totally unrelated.
C) inversely related.
D) randomly related.

Question

Quizplus · Accepted Answer

Inflation and the purchasing power of money have an inverse relationship. As the rate of inflation increases, the purchasing power of money decreases, which means that the value of money decreases over time. Conversely, as the rate of inflation decreases, the purchasing power of money increases, and the value of money increases over time.

The Rate of Inflation and the Purchasing Power of Money