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    Question

    What can be the possible impact of Inflation on

    Purchasing Power of Money?
    A It reduces Correct Answer Incorrect Answer
    B It increases Correct Answer Incorrect Answer
    C It remains the same Correct Answer Incorrect Answer
    D It can both reduce or increase Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Purchasing power measures what a unit of currency can buy, while inflation measures rising prices. As inflation rises, purchasing power falls because one needs more units of currency to acquire the same basket of goods.

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