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The value of money: A) increases over time B) is constant over time C) increases with...

The value of money:
A) increases over time
B) is constant over time
C) increases with inflation
D) decreases with inflation

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Answer #1

Option A and B are incorrect because Value of money depends on various factors such as inflation, interest rates etc. So, It can't be said certainly whether it will increase or decrease.

If there is inflation,it means the level of Prices will be high which will cause Purchasing power to decrease which means that less goods and services can be purchased with the same money.

Therefore,with Inflation Value of money decreases

Therefore,the correct answer is Option D

Option C is incorrect because Inflation will cause Purchasing power to decrease which will cause the Value of money to decrease and not Increase

Option A and B are incorrect because Value of money depends on various factors such as inflation, interest rates etc. So, It can't be said certainly whether it will increase or decrease

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