Inflation erodes purchasing power from "summary" of Basic Economics by Thomas Sowell
When the supply of money increases faster than the supply of goods, the price of money falls. This means that each unit of money buys less than it did before. In other words, the purchasing power of money is eroded by inflation. This erosion of purchasing power has many consequences for individuals, businesses, and the economy as a whole. For individuals, inflation means that the money they have saved or invested will buy less in the future than it does now. This can be particularly devastating for people on fixed incomes, such as retirees, whose purchasing power is eroded by rising prices. For businesses, inflation can lead to higher costs for raw materials, labor, and other inputs. These higher costs may be passed on to consumers in the form of higher prices, leading to a vicious cycle of inflation. Inflat...
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