What is inflation:
Inflation is the rise in the general price level of goods and services over time, reducing the purchasing power of money.
Pros of Inflation:
Encourages Spending & Investment – People buy goods sooner before prices rise.
Reduces Debt Burden – Fixed debts become easier to repay as money loses value.
Boosts Economic Growth – Moderate inflation encourages businesses to expand.
Prevents Deflation – Avoids economic slowdowns caused by falling prices.
Cons of Inflation:
Reduces Purchasing Power – Money buys less over time.
Increases Cost of Living – Essentials like food and rent become more expensive.
Creates Uncertainty – Businesses and consumers struggle to plan for the future.
Hurts Savings – Money in savings loses value if interest rates are low.
THE END