n NISM Certifications
X NISM Series X
Medium

Which statement is true about inflation?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. It reduces the purchasing power of money

    Correct answer

  2. B

    It does not affect the value of money

  3. C

    It enhances the value of money

  4. D

    No relation exists between inflation and purchasing power

Why this is the answer

Inflation causes a rise in prices, decreasing the amount of goods or services that a unit of money can buy.

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