Question

If a government inflates its currency, what tends to happen to investors in that country?

1) They tend to lose money
2) They tend to gain money
3) Their investments remain unaffected
4) It depends on other factors

Answer 1

If a government inflates its currency, investors in that country may tend to lose money.

Step-by-step explanation:

If a government inflates its currency, it tends to lead to a depreciation of the currency. As a result, investors in that country may tend to lose money. When the value of the currency decreases, the purchasing power of the currency also decreases, which can have negative effects on investments and returns.