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Jlenok [28]
3 years ago
5

Why do governments aim to have a stable inflation rate?

Social Studies
1 answer:
vovikov84 [41]3 years ago
6 0

Answer:

<em>A low inflation rate promotes the efficient use of productive resources. When inflation is high, a substantial</em><em> quantity of individual people's time and resources from the economy are invested in searching for mechanisms</em><em> to defend themselves from inflation. </em><em>So</em><em> </em><em>, for example</em><em> </em><em>when</em><em> </em><em>the</em><em> </em><em> inflation is high, businesses have to channel</em><em> </em><em>more resources into portfolio management in order to avoid financial losses. This is an inefficient use </em><em>of</em><em> </em><em>productive resources that do not generate wealth to society.</em>

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