What is more desirable inflation or deflation?
It depends ..
Why is inflation both good and bad?
inflation is both good and bad.. however, if compare with deflation, inflation is less evil. why?? consider these.. -deflation decrease the national income of the community and pauperize society as a whole. -deflation increase the level of unemployment. -it is easier to control inflation but hard to recover from deflation. -mild inflation may stimulate economic growth.
Is the deflation good for the economy?
yes,deflation...in my own opinion is good to the country,but permit me to say the little i know about (inflation) and( deflation).inflation...means when there is excess of money circulating within a given country while deflation means when there is less money.......so deflation is good for a country in a way that,there will be no inappropraite in terms of goods and services,,
What is the definition of economic inflation?
Economic inflation or just inflation is the rate at which the general level of prices for goods and services is rising. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum. Inflation or deflation will always occur in a economy but the role of the Fed is to make less severe.
How did deflation in the late 1800s effect the farmers?
Nobody could afford to pay the prices for crops that the farmers expected. Also, the debt which farmers already had would be much easier to pay off if the economy was going through inflation. (Inflation for example would be if an ordinary dollar bill's worth was increased to 2 dollars; deflation is when a dollar's value is decreased.) With deflation, the farmers must pay with more dollar bills, and during inflation, they would have to…
Does high inflation harm people?
Yes high inflation always harm ppl. In high inflation there is an inc in prices of all goods. Poor become more poor. Basic necessaities are more dearer. But consequences of inflation re less harmful than deflation. Both inflation and defltion are harmful for the economy . A balance between both is a balanced econony
What happens during deflation?
Economics: During Deflation the price of goods and commodities goes down. A Deflation is the situation exactly opposite to inflation. Usually during a deflation there is a significant shortage of money and credit. You can find instances of Deflation in the world history during Wars... Geology: The lifting and removal of loose material by wind. (In the desert, resulting in desert pavement)
What are the advantages and disadvantages of inflation and deflation?
Advantages of inflation are adjustment of relative prices and wages along with boost of growth. Disadvantages include damaged period of boom and bust economic cycle, non competitive economy and reduced value of saving. On the other hand disadvantages of deflation are reduced spending, low profit and increased borrowing. Advantage of deflation is decrease in rate of commodities.
What was the inflation rate after the great depression?
We were on the gold standard then. No fiat currency http://inflationdata.com/inflation/images/charts/Annual_Inflation/inflation_Cumulative.htm I don't think there was much inflation after the depression. During the depression there was deflation. The economy recovered slowly so there was no spike in inflation.
Is inflation always bad for economy?
Inflation is certainly not always bad for economy, in fact a moderate level of inflation matching to it's growth rate is good for the country. Moderate inflation suggest demand in the system while no inflation or deflation suggest demand collapse which is much more dangerous than Inflation. For Instance US inflation is 1.5 to 2% while it's growth is 2-3%. This equation is ok. A Country having an inflation equal to it's growth rate is…
When will the real GDP be higher than norminal GDP?
When there is a deflation in an economy (with the growth is still positive.) This is due to the fact that the value of money increase during a deflation (as opposed to inflation.) However, growth during this period is very difficult since deflation is characterized largely by deffered consumption and investments.
What is deflation in economics?
Deflation is when prices on average go down without productivity increases or technology changes making this happen. So the prices of computers going down is not deflation because technology changes have made this happen. This happens because there are fewer dollars in circulation This is the opposite of inflation where the prices increase.
What are main Difference between inflation and deflation in points?
Inflation: 1. Inflation redistributes income in the favor of the rich and the profiteer class at the cost of the poor masses - the wage-earners and consumers. 2. Through its redistributive effects, inflation increases the inequality of income in the community by widening the gulf between higher income groups and lower income groups. The rich become richer and the poor become poorer during inflation. 3. Inflation is regressive in effect in the sense that it…
What was inflation back in the 1900s?
Inflation was the same thing back then as it is now. Inflation rates were and are different in different countries, so the amount of inflation in each country is always different, depending on the solidity of the local currency. In Britain the inflation rate in 1900 was 4.5%. In the USA it was 16.9% but then fell to -2.4 the next year. Inflation rates in the US changed greatly from year to year and were…
Is deflation of the money supply a good thing?
Deflation is a situation where the amount of the money supply is in a state of shrinking. It's a good thing if inflation is running high and out of control. In a normal economy, deflation means less money in circulation which causes the economy to suffer. Money is scarce and prices may be too high in relation to the money supply. This causes economic problems.