Statement 1: Inflation reduces purchasing power.
Statement 2: Inflation always benefits savers.

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1. **Statement 1:** Correct. Inflation means prices go up, so the same money buys less stuff. This lowers purchasing power.

2. **Statement 2:** Wrong. Inflation does not always help savers. If the interest rate on savings is less than inflation, savers lose real value.

3. Example: if nominal interest is 2% and inflation is 5%, the real return is $r_{real}=r_{nominal}-\pi=2\%-5\%=-3\%$.

4. **Conclusion:** Only Statement 1 is correct.

FINAL_ANSWER: a

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