Why are people with savings hurt by inflation? a. inflation reduces the interest savings accounts pay. b. inflation discourages people from saving. c. the money is worth more now than it was in the past, leading to a higher tax bill. d. the money they saved in the past is worth less in the future.

First of all, it is important to know what Inflation means. Inflation is the decrease in value of money. That is why gas previously cost 10 cents per gallon. First, let us start off with the process of elimination.

A. Inflation will not reduce the price you pay, if anything, it will raise it.
B. If Inflation discouraged people from saving, then no one would ever save.
C. Inflation is the decrease in the amount it is worth, instead of buying one apple with 20 cents, you have to buy one apple with one dollar.
D. This is the only logical answer. If you have one dollar in your savings, its value is the same as a dollar in your pocket. This means that even though it is in your savings account, that does not mean it is worth the same.

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