INFLATION can be BENEFICIAL
How can inflation actually help you?
Well, it can if your keep your account in the negatives.
NO, inflation CAN benefit and produce a better economy.
- During periods of inflation, investors and entrepreneurs are given more incentives (like tax concessions and subsidies) by the government to invest in productive activities. As a result, they obtain higher returns.
The value of debt will be decreased at the time of inflation because of the decline in the value of money. So, debtors can repay their loans easily.
The demand for different production elements, including labor grows. As a result, employment and income rise in response to inflation.
Financial institutions get more money because of an increase in wages and sufficient deposits. It makes it easy for people to borrow money from banks.
Quite interesting!
ReplyDeleteTrue It depends upon the resources utilisation. If fully utilised and than inflation occurs it is not good for the economy. But if resources are not fully utilised than it is good for the economy.
ReplyDeletegreat article enlightened me , now i am an economist
ReplyDelete