Question

If there is inflation, which of

the following is true?
A. Money received in the future will have
less value than money that is received in the
present.
B. Real output will increase and will balance
out the effect on the value of real dollars.
C. Money received in the present will have
less value than money that is received in the
future.
D. The opportunity cost will balance out the
effect on the value of real dollars.

Answer 1

Inflation causes money received in the future to have less value than money received in the present.

Step-by-step explanation:

When there is inflation, money received in the future will have less value than money received in the present.

For example, if you receive $100 today and there is 5% inflation, next year that $100 will only have the purchasing power of $95.

Therefore, option A is the correct answer.

Learn more about The effect of inflation on the value of money