Inflation is unjust and deflation is inexpedient of the two, perhaps, deflation is worse." Explain this statement. don't copy from gogle ok
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Answer:
inflation is unjust because persons who save are losers in the long run. When prices are rising, the value of money is falling. Since savers are mostly the low and middle income groups who save for a variety of reasons, they are the losers. Their savings lying in deposits are reduced automatically in real terms as inflationary pressures increase.
Inflation is unjust because it is socially harmful. People are lured to amass wealth by unscrupulous means. They, therefore, resort to hoarding, black-marketing, adulteration, manufacture of sub-standard commodities, speculation, etc. Corruption spreads in every walk of life. All this reduces the efficiency of the economy.
Deflation, on the other hand, is inexpedient because it reduces national income, output and employment. While inflation takes away half the bread of the poor, deflation impoverishes them by taking away the whole of it. Deflation leads to mass unemployment because fall in production, prices and profits force producers and businessmen to close down their enterprises