Which statement best describes how inflation affects the value of investments over time?

a. it erases the value of investments.
b. it increases the value of money.
c. it decreases the value of money.
d. it controls the value of investments.

The correct answer is C.

Inflation is defined as the sustained increase of the price level of an economy over time. In a scenario where prices keep on growing, the value of money decreases because, with the same amount of money, a smaller quantity of goods and services can be purchased as these have become relatively more expensive.

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