Question

Holding money is a relatively risk-free way to store wealth when is nonexistent or mild.

Answer 1

Holding money is a relatively risk-free way to store wealth when **inflation** is nonexistent or mild. When inflation is low, the purchasing power of money remains stable, making it a safer option for saving and holding wealth compared to investing in assets that may be more volatile. High inflation can erode the value of cash holdings, making it less advantageous to hold onto money rather than investing it in opportunities that can provide returns that outpace inflation.