How does inflation affect money?

B.

By inflating the amount of currency, inflation reduces the value of money.

Medium of exchange: People will be reluctant to trade goods / services for money if they think the value of the money will decrease. As a result, they will demand more money for the goods / services, increasing the rate of inflation. Unit of account: 1) Inflation tends to change the prices of different goods / services by different amounts and at different times, distorting their relative values. This creates a situation with constant disequilibrium. 2) Knowing the relative value requires participants in the economy to have current information, which is difficult when prices are constantly changing. Store of wealth: Knowing that money held will be worth less in the future will affect spending patterns: what people spend their money on, and when they spend it. For example, they may feel like they need to buy what they can on payday, instead of spreading the paychecks out throughout the month. They also would be less likely to increase their savings, thus more people will be living paycheck to paycheck. All of this will tend to decrease their standard of living, as they run out of disposable income earlier in the pay period, and have less to live on in between paychecks.

B. Because the USA is going there.

B. Because there are no better options.