21
QuizMultiple Choice

Unit 6 Test

Question 21 • (OC27) Economics-2102310-Sem-Meadows

Which statement best describes how inflation affects the value of investments over time?

Answer
A
It erases the value of investments.
B
It increases the value of money.
C
It decreases the value of money.
D
It controls the value of investments.

Explanation

Inflation means prices rise over time, so the same amount of money buys fewer goods and services. This decreases money’s purchasing power and can reduce the real value of investments if their returns do not keep up with inflation. Therefore, “It decreases the value of money” is the best choice.

AI-written and checked against the verified answer.

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