Question

explain how inflation affects the value of money.

Explanation:

Inflation is a general increase in prices. When there is inflation, the same amount of money can buy fewer goods and services over time. This is because the purchasing - power of money decreases. For example, if a loaf of bread costs $1 today and due to inflation it costs $1.10 next year, the dollar's value has declined as it can't buy as much bread as before.

Answer:

Inflation decreases the value of money as it reduces its purchasing - power, meaning the same amount of money can buy fewer goods and services over time.