Inflation is undesirable because it: Multiple Choice always makes the nation poorer. redistributes income from those who can rai

Question

3 years ago

10

se prices to those who cannot. distorts the information value of prices. makes everyone worse off.

1 answer:

Firlakuza [10] · Answer 1 · 2023-02-06T20:43:53+03:00

Inflation is undesirable because it redistributes income from those who can raise prices to those who cannot.

<h3>What is inflation?</h3>

In the field of economics, inflation refers to an overall rise in the cost of goods and services throughout a nation.
Each unit of currency may purchase fewer products and services as the general price level rises, hence inflation is associated with a decline in the purchasing power of money.
A general increase in prices over time diminishes customers' purchasing power because a constant quantity of money will eventually allow for less consumption.
Whether inflation is running at 2% or 4%, consumers still lose purchasing power; the higher inflation rate only doubles that loss.
Those interest rates that are fixed for the duration of the loan, won't fluctuate in line with inflation.

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