Inflation can have positive impacts on an economy.
A moderate level of inflation encourages spending and investment as consumers and businesses try to avoid the higher costs that may come with inflation.
A moderate level of inflation encourages spending and investment as consumers and businesses try to avoid the higher costs that may come with inflation.
It also reduces the burden of debt on borrowers, as the value of their debt decreases over time.
Inflation can also lead to increased production, as firms are encouraged to invest in new projects to take advantage of the higher prices they can charge for their products.
This leads to more jobs and a higher standard of living.
However, high inflation can have negative impacts on an economy.
High inflation reduces the purchasing power of a currency, making it more expensive to buy goods and services.