why inflation is required
Answers
Explanation:
Economists believe inflation comes about when the supply of money is greater than the demand for money. Inflation is viewed as a positive when it helps boost consumer demand and consumption, driving economic growth. ... John Maynard Keynes said that some inflation helps prevent the Paradox of Thrift—delayed consumption.
Answer:
In common conversation, inflation is a broad increase in the prices associated with a constant amount of goods and services and it is typically spoken of as a negative factor. But like wind, price changes are always present. They become financially significant only when they become abnormally large, fast, or widespread.
Meanwhile, images of consumers toting wheelbarrows full of currency in places such as Germany in the 1920s and Argentina in the 1980s have etched the impact of rapidly rising prices on the public consciousness. But from an investment perspective, disinflation (when the pace of price increases slows down) and deflation (when the overall cost of living actually declines) can cause significant problems too. All such factors should be considered.
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