What happens to the worth of money over time due to inflation?

Inflation refers to the rate at which the general level of prices for goods and services rises, eroding purchasing power. As inflation increases, the same amount of money buys fewer goods and services than it did in the past. Therefore, the worth of money diminishes over time, making it less valuable in terms of what it can purchase compared to previous time periods. This is why the correct choice reflects that money becomes worth less as inflation progresses. Understanding this concept is crucial for investment strategies, as it emphasizes the importance of earning returns that outpace inflation to preserve and grow wealth over time.