According to some economists, which of the following are positive effects of mild inflation?<\/p>\n
A) Increased purchasing power<\/p>\n
B) Lower interest rates<\/p>\n
C) Improved savings<\/p>\n
D) Encouragement of spending<\/p>\n
Answer: D) Encouragement of spending<\/span><\/strong><\/p>\n Someone famous economist provides that gotten of moderate inflation is those people take a liking to this spending. While the prices are crawling up as a result of the inflation process , consumers get the chance to rush in and spend their cash in order to keep its value because during this period the value of their cash will continuously erode. This is probable through the rise in spending; consumers have demand which precipitates economic growth. In addition, as inflation even occasionally has the tendency to pull consumers away from saving excess, as the value of their savings become lower due to inflation. Working as disinflationary, mild inflation can only assist the economy by stirring up the spending and investment, and thus, save it from drowning into inflationary spiral, which is usually quite dangerous and can contribute to protracted economic downturn. Therefore, it should be mentioned that there is a limit for inflation when it comes to policy, otherwise there can be negative consequences.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" According to some economists, which of the following are positive effects of mild inflation? A) Increased purchasing power B) Lower interest rates C) Improved savings […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\n