(01.06 LC) Which function of money is directly affected by inflation? Medium of exchange Measure of value Standard Store of value

## Step 1<br />Inflation refers to the general increase in prices and the decrease in the purchasing power of money over time. This means that the same amount of money can buy fewer goods and services than it could before.<br /><br />## Step 2<br />The function of money that is directly affected by inflation is its role as a store of value. This is because inflation erodes the purchasing power of money over time.<br /><br />## Step 3<br />When inflation is high, the value of money decreases, meaning that the same amount of money can buy fewer goods and services than it could before. This makes money a less effective store of value.