Answer:
The correct answer is True.
Step-by-step explanation:
In this case people will most likely use a higher proportion of their incomes on basic needs.
It decreases the purchasing power of money: Inflation affects money as an accumulator of value and thus reduces purchasing power to people's income. In inflationary periods this fundamentally affects those people who have fixed incomes. In reality, there is a change in the distribution of income, since as income grows at a faster rate than prices, it can thus benefit from an inflationary process, but otherwise it causes damage.