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What is the relationship between the purchasing power of money and the rate of inflation?

April 26, 2017inflation money purchasing power rate relationship

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What is the relationship between the purchasing power of money and the rate of inflation?

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Interest and inflation are related in one, main way, and that is through the fluctuation of avaliable money. If the Fed decides that they are going to produce more paper money, then the average person will have more purchasing power, thus spend more on things they wouldn’t normally.