Inflation interferes with the functions of money. Which of the three functions is impaired, even when the inflation rate is quite low? Considering higher rates of inflation, which function is affected next?

Which function of money is the last to suffer substantial damage from inflation?


A consequence of even low inflation is to undermine money's function as a store of value. At somewhat higher rates, inflation complicates the use of money as a unit of account, because of increased variability of relative prices. As the inflation rate goes higher, money loses its ability to serve as a medium of exchange.

Economics

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