The rising or falling of prices that causes changes in buying power is referred to as

2 answers:

3 0

Inflation is the rate at which the general level of prices for goods and services is rising and consequently the purchasing power of currency is falling. The rise or the fall of price determines the inflation rate in a given economy and therefore also determines the purchasing power by consumers. When prices goes up then there is a decrease in purchasing power of money while when the prices down there is a corresponding increase in purchasing power of money. For this reason central banks strives to limit inflation, and avoid deflation, in order to keep the economy smoothly running.

Taya2010 [7]3 years ago

3 0

<span>This is referred to as an inflation risk, or sometimes called a purchase power risk. this is just a risk taken that purchases or investments won't be worth as much in the future because inflation will affect the purchasing power .</span>

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