108k views
2 votes
Inflation causes money to ________ its value over time.

1 Answer

2 votes

Inflation causes money to lose its value over time.

It happens because inflation measures the loss of the purchasing power of money and reflects the general increase in prices. The higher the inflation, the greater the monetary devaluation.

For example, a product that costs "x" in January will have an inflationary increase that will raise this value to "y" in December of the same year. However, the value of money will be the same in January and in December of that year, unless it is applied to some source of secure income, such as savings, that corrects that ammount monthly.

User Silvo
by
6.1k points