Respuesta :
Inflation is when an economy experiences an increase in the prices of goods and services and a decrease in the value of currency. This generally happens over a period of time, however this does not mean that inflation is all negative, as it has some positive effects. The best rate for inflation is low and steady.
When an economy experiences the rise in the price of goods and services and the value of currency decreases, then the economy faces high inflation.
Further Explanation:
Inflation:
Inflation is the process by which the prices of goods and services gradually increase from time to time. The low inflation means the price of the goods and services is not rise suddenly. The high inflation means the price of goods and services is rising suddenly.
As the low inflation is a sign of a healthy economy which increases the demand steadily, then automatically increases the supply of the market. The low inflation creates demand in the market, which ultimately increases the growth of the economy.
When inflation is high and the wages are not increased according to the rise of inflation. Then the inflation is said high. Inflation is considered low when the wages are increased according to the rise in the prices of all goods and services.
In this case, as the prices of goods and services is high and the value of currency decreases, it shows the high inflation. The economy is not going good with high inflation.
Stagflation is related to inflation when the inflation is so high with high unemployment and a low level of production. Staflagtion is a more dangerous condition for the economy as compared to inflation.
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Answer details:
Grade: Middle School
Subject: Economics
Chapter: Inflation
Keywords:
Low inflation, sign, healthy economy, because, it results, steady rise, in demand, according to the rise of inflation, considered low, prices of goods and services, high unemployment and a low level of production,the value of the currency.
