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Money held as a store of value can still lose what over time?
AIts status as a legally acceptable means of payment
BIts ability to be divided into smaller usable units
CSome of its purchasing power, because of inflation
DIts role as the standard unit for pricing products
Answer & Solution
Correct answer: C. Some of its purchasing power, because of inflation
1. As a store of value, money is used to hold wealth and it retains its value over time.
2. That holding is not perfect, because money may lose some of its purchasing power due to inflation.
3. So an individual who keeps money for future use rather than spending it today carries inflation risk.
4. Inflation does not cancel acceptance in payment or the pricing role, so those two functions survive intact.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.1 Show Me the Money_
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