Final answer:
The statement is true. Inflation can be harmful if individuals' incomes do not increase at the same pace as rising prices because it reduces their buying power. True.
Step-by-step explanation:
Inflation can be harmful if individuals' incomes do not increase at the same pace as rising prices because it reduces their buying power. When inflation occurs, the prices of goods and services rise, but if incomes do not keep up with these rising prices, individuals will have less purchasing power. For example, if someone's income remains the same while the prices of goods and services increase, they will be able to buy fewer things with the same amount of money.