Question

state one positive n negative effect of inflation​

Answer 1

Answer:

Deflation is potentially very damaging to the economy and can lead to lower consumer spending and lower growth

Answer 2

Answer:

*POSITIVE EFFECT*

Moderat rates of wage inflation, allow relative wages to adjust. NOminal wages are sticky downwards. WIth moderate inflation, firms can freeze pay rises for less productive workers – to effectively give them a real pay cut.

*NEGATIVE EFFECT*

High inflation rates tend to cause uncertainty and confusion leading to less investment. It is argued that countries with persistently higher inflation, tend to have lower rates of investment and economic growth.

Hope this will help uhh..!