Question

In a period of inflation, the purchasing power of a country's currency.
a. true
b. false

Answer 1

In a period of inflation, the purchasing power of a country's currency decreases. The correct answer is: a. true.

Step-by-step explanation:

In a period of inflation, the purchasing power of a country's currency decreases.

When there is inflation, the value of money decreases, which means that it can buy fewer goods and services compared to before.

This happens because as prices rise, the same amount of money can purchase fewer goods. For example, if a loaf of bread used to cost $1 and there is 10% inflation, then it would cost $1.10 after the inflation.

The correct answer is: a. true.