11
QuizMultiple Choice

Inflation, Interest Rates, and Investment Decisions — Quiz

Question 11 • Personal Finance

What happens to money when inflation increases?

Answer
A
It buys fewer goods and services
B
It stays constant
C
It earns more interest automatically
D
It gains value

Explanation

Inflation means prices generally rise over time. As prices rise, the same amount of money can buy fewer goods and services, so its purchasing power decreases. It does not automatically earn more interest or gain value.

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