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Because it provides stability and it is easier to predict. This makes it easier for business to plan (especially banks) what they will do in the future. Uncertainty is sometimes just as bad as a shrinking economy.

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โˆ™ 2009-03-08 15:28:39
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Q: Why is a constant inflation rate less harmful to an economy than a rate that fluctuates a lot?
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Is inflation harmful?

Too much inflation will ruin the economy but small levels of inflation will spur growth. Inflation is very harmful to any economy because it can ruin the economy's development and growth and this is not suppose to be. Inflation is also very harmful to any economy because the people living in that economy might not survive the situation and this is when you see that an economy is affected and if nothing is done to it, it can cause an economy to collapse.


Why are fluctuations in the economy harmful?

Inflation can be harmful if individuals' incomes do not increase at the same rate as rising prices, because then the consumers buy less. Economic contraction is harmful because companies begin to lay off workers, and the economy slows down.


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


Is this statement Inflation is more harmful to the economy than unemployment a positive statement?

equality is more important than efficiency. Is that a positive or normative statement?


What can be harmful for the economy?

what can be harmful to the economy is when the non renewable resources are finished


Why inflation at very high level and very low level is harmful for economy?

Inflation at a very low level will be harmful for the economy because when the low infaltion will prevail in the economy purcahsing power of the people will get high and they will demand for more goods increase in demand will leads to increase in production in the short run it will be profitable but in the long run it will be harmful for the economy because in the lon run factors of production will be repletion and will lead to lower production and leads to economic crised. in the long run factors of production decides the price of the products not the demand of the products.


Inflation is most harmful to?

Inflation is the most harmful to those that cannot afford it. Since it can cause people to lose money, it can be devastating to individuals and businesses that already have little money.


Who inflation is most harmful to?

Inflation is the most harmful to those that cannot afford it. Since it can cause people to lose money, it can be devastating to individuals and businesses that already have little money.


Which insect harmful to man both healthwise and economy wise?

mosquitos


What are the benefits of homeostasis?

homeostasis maintains a constant or nearly constant body environment to save it from the harmful effects of fluctuations in the external enviroment.


Why is being bulimic harmful?

First of all, being bulimic is harmful because you will eventually starve to death if you persist in bulimia. Second of all, your teeth will decay because of the constant throwing up. Bulimia is VERY harmful.


Why is fuel economy important?

For the vehicle owner it saves money. For the environment, it means less harmful emissions.

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