Consider it like this: inflation acts similar to a very small monster bit by bit eating absent for the purchasing electricity of one's hard cash reserves. The a lot quicker inflation rises, the more rapidly your money loses its benefit.
The time period “real money” could conjure visuals of crisp banknotes or shiny coins jingling inside your pocket. Which’s undoubtedly part of the image!
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We’ve viewed how inflation can erode the value of real money, but So how exactly does it affect the overall economy? The connection is elaborate, but right here’s a simplified breakdown:
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