Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter13: Measuring The Economy's Performance
Section: Chapter Questions
Problem 12AA
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Question
What should people do when inflation is high
Expert Solution
Step 1 Inflation
Inflation is a general rise in the price level in a economy over a period of time which results in reduction in the purchasing power of people. Thus inflation influences the purchasing ability of the people regarding goods and services of daily use such as food, clothing, housing, transport etc.
when the inflation is high the cost of living also gets higher, which ultimately retards economic growth, certain level of inflation is good to promote expenditure and demotivating hoardings.
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