What are the functions of money is as a store of value how does inflation affect Money's ability to store a value

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Sonia Conley

Business

9 January, 01:13

What are the functions of money is as a store of value how does inflation affect Money's ability to store a value

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Dearest · Answer 1

Inflation reduces the value of money.

Explanation:

Money as a store of value means the ability to hoard money and hold it till a future date.

Inflation is the increase in the general price level of goods and services in an economy at a period of time.

Inflation affects the value of money negatively. It reduces the purchasing power of money, that is what $100 dollars will buy in a normal economy will now be purchased by more than $100.

Hence, a negative relationship subsist between the use of money as a store of value and inflation.