sprinkles3831 sprinkles3831
  • 11-01-2018
  • Business
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Why is inflation both good and bad how does the government try to control it?

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Kalahira
Kalahira Kalahira
  • 23-01-2018
Inflation is good because it keeps the economy growing as wages increase and demand for goods goes up, but if inflation gets high then the economy can become overheated when prices go up too fast and people can't afford goods. The Federal Reserve Bank, if you're in the USA, will then raise interest rates to make loans more expensive and rewarding people for not spending money, which slows down the economy back to a healthy state.
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