Question on: SS2 Economics - Causes & Effects of Inflation/Deflation
What is the impact of inflation on the purchasing power of money?
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A
It increases the purchasing power of money
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B
It decreases the purchasing power of money
C
It has no impact on the purchasing power of money
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Correct Option: B
(It decreases the purchasing power of money. This means that the amount of money formerly needed to purchase a good or service has increased. Thus, the consumer will purchase less of that good and service)
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