Inflation

Question

Inflation

Quizplus · Accepted Answer

Inflation reduces the purchasing power of money over time. As prices rise, the amount of goods and services that can be bought with a fixed amount of money decreases, thereby hurting savers who have stored their money in cash or low-yield savings accounts. On the other hand, borrowers benefit from inflation because the value of the money they have borrowed decreases over time, and they can repay their loans with less valuable currency. Therefore, option A is the most appropriate choice.