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    Question

    Each sentence given below has a blank. Choose the most

    appropriate word from the options that best fits the context of the sentence. In the absence of basic financial awareness, individuals may underestimate the long-term impact of inflation, which steadily reduces the ______ of money over time.
    A mobility Correct Answer Incorrect Answer
    B durability Correct Answer Incorrect Answer
    C credibility Correct Answer Incorrect Answer
    D purchasing power Correct Answer Incorrect Answer
    E circulation Correct Answer Incorrect Answer

    Solution

    Inflation refers to the rise in prices, which means money can buy fewer goods and services over time. Therefore, inflation reduces purchasing power. Option meanings Mobility – ability to move Durability – ability to last long Credibility – trustworthiness Purchasing power – amount of goods/services money can buy (Correct) Circulation – movement of money in the economy Hence, purchasing power is the correct answer.

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