Question

State and briefly explain THREE arguments against inflation

Answer 1

$\underline{\huge{Answer:-}}$

Three effects are:

• Decrease in the value of the dollar
• increase interest rate in loans
• decreasing real returns on savings.

Explanation:

However, if other economic variables do not move exactly in sync with inflation, or if they adjust for inflation only after a time lag, then inflation can cause three types of problems: blurred price signals. unintended redistributions of purchasing power. difficulties in long-term planning.

Answer 2

Answer:

\underline{\huge{Answer:-}}

Answer:−

Three effects are:

Decrease in the value of the dollar

increase interest rate in loans

decreasing real returns on savings.

Explanation:

However, if other economic variables do not move exactly in sync with inflation, or if they adjust for inflation only after a time lag, then inflation can cause three types of problems: blurred price signals. unintended redistributions of purchasing power. difficulties in long-term planning.