NISM Series XII (SMF) Practice Questions - NISM-Series-XII Securities Markets Foundation Certification Examination Exam

How does inflation affect the purchasing power of money over time?

Inflation increases purchasing power as prices rise Inflation has no impact on purchasing power Inflation erodes purchasing power by decreasing what a unit of currency can buy Inflation stabilizes purchasing power by fixing interest rates

Correct Answer:

Inflation erodes purchasing power by decreasing what a unit of currency can buy

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