Answer:
Impact in Purchasing Power
Inflation is defined as a decrease in the buying power of a currency, which has the consequence of increasing the price of items. In order to assess buying power in the classic economic sense, you would compare the price of an item or service to a price index, such as the Consumer Price Index, which measures inflation (CPI).
Explanation:
Impact in Savings
When you save money, inflation might lower the value of your savings over time since prices are expected to rise in the future. This is particularly obvious when dealing with cash. When you store your money in a bank, you may be able to receive interest, which may help to offset some of the impacts of inflation on your finances. When inflation is strong, banks are more likely to offer higher interest rates to customers.
