Melanie decided to save 20% of her annual earnings for 10 years so she would have a down payment for a house. After 5 years, what change in the economy would cause an increase in the purchasing power of the funds she has managed to save?

Question

Business

Tristin Arias

19 March, 00:59

Melanie decided to save 20% of her annual earnings for 10 years so she would have a down payment for a house. After 5 years, what change in the economy would cause an increase in the purchasing power of the funds she has managed to save?

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Answers (1)

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Adriel Howell · Answer 1

Deflation

Explanation:

Deflation as a change in the economy would cause an increase in the purchasing power of the funds she has managed to save.

Deflation is the opposite of inflation which depletes the purchasing power of funds.

Prices Changes due to Deflation. Deflation is the number-one trigger of economy-wide increased purchasing power because as prices of goods and services falls the value of money increases because consumers can buy more with a given amount of money.