If prices for everyday items increase more quickly than wages do, what happens to the purchasing power of...

If prices for everyday items increase more quickly than wages do, what happens to the purchasing power of the money people earn each month?
It decreases and makes each dollar buy fewer goods and services than before
It rises and allows households to buy more goods with the same amount of money
It remains unchanged as long as people continue earning the same paycheck
It doubles in value and increases overall consumer demand in the economy