0
What is better for the economy low inflation or high inflation?
Wiki User
∙ 13y ago
Generally, low inflation is better for society because inflation has costs associated with the reallocation of assets and their value (that is, it costs money for people to change their decisions when inflation changes the value of their goods/services).
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What happend to the economy during stagflation?
In stagflation, you have high inflation, high unemployment, and low demand.
What does the Phillip's Curve illustrate?
A graph that shows that there is a relation between unemployment and inflation: One can either have a high inflation and low unemployment or low inflation with high unemployment.
What is Zero inflation and Mild inflation?
Zero inflation is where the economy reach a state of 0% inflation rate. This is not really good in the sense that it shows the economy is stagnant/not growing. This may turn away the investors. Mild inflation is basically low rate of inflation around 2% to 3%. Mild inflation shows that an economy is stable and indicates economic growth.
Is it good to have a high inflation rate or low?
Low inflation is considered good because it represents price stability, which encourages productive planning and investment.
What changes results in economic growth?
depending on what system you are examining, the answer varies. for a capitalistic (us) economy, scarcity and independent markets drive the economy. supply and demand. the ability to independently set prices keeps the market moving with competition. adam smith.
What happend to the economy during stagflation?
In stagflation, you have high inflation, high unemployment, and low demand.
Why is the economy in Luxembourg so good?
luxembourg's stable, high-income economy features moderate growth, low inflation, and low unemployment.
When you are earning interest is it better to have high or low rates?
High rates.However, high interest rates are usually a consequence of high inflation rates and so what matters is not the interest rate but the real interest rate which is the nominal interest rate relative to the inflation rate.Thus a 3% interest rate when inflation is 1% is better that a 5% interest rate when inflation is 4%.
What does the Phillip's Curve illustrate?
A graph that shows that there is a relation between unemployment and inflation: One can either have a high inflation and low unemployment or low inflation with high unemployment.
What is the inverse relationship between inflation and unemployment rates?
They are inversely related. High unemployment means lots of people don't have jobs. Because they don't have jobs their incomes are low. Low incomes means they can't spend much money on products. This means that demand in the economy will fall. This fall in demand will drive producers to lower prices...and therefore inflation falls. So... High unemployment = low inflation Low unemloyment = higher inflation
What is Zero inflation and Mild inflation?
Zero inflation is where the economy reach a state of 0% inflation rate. This is not really good in the sense that it shows the economy is stagnant/not growing. This may turn away the investors. Mild inflation is basically low rate of inflation around 2% to 3%. Mild inflation shows that an economy is stable and indicates economic growth.
Is near zero level inflation is bad?
Though a Zero inflation is practically very difficult to achieve, very low levels of inflation are actually bad for the economy. Inflation determines the increase in prices of goods and services in a country's economy year on year. A very low or zero inflation means a very low level of growth in prices for goods and services which in turn implies that the economic growth in the country is also very poor. In a growing or flourishing economy the prices of goods and services increase in a steady and consistent manner year on year. This means the country's economy is growing steadily. Inflation rates of around 5-6% are considered ideal for countries. A very low inflation is bad for the economy and at the same time a double digit inflation is also very bad for the economy.
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.
What are the indicators if a bad economy?
1) High unemployment 2) Low national income 3) extremely high inflation 4) unstable exchange rate 5) persistent Balance of Payment deficit.
What will most likely spur concession bargaining?
high inflation, low unemployment, high profit, or low turnover
Is it good to have a high inflation rate or low?
Low inflation is considered good because it represents price stability, which encourages productive planning and investment.
What changes results in economic growth?
depending on what system you are examining, the answer varies. for a capitalistic (us) economy, scarcity and independent markets drive the economy. supply and demand. the ability to independently set prices keeps the market moving with competition. adam smith.
