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State four positive effects of inflation in an economy

State four positive effects of inflation in an economy.

Answers

mwangi
1. Inflation pushes growth thus increases production.
2. Increment in wages.
3. It will make travelling abroad cheaper reason being purchases from other countries will become cheaper.
4. It gives better savings account rates.
5. People tend to buy more with expectation that prices will continue to rise. Demand increases and this lead to increase in production. Eventually, companies make more profits.
6. Rising prices of commodities lowers/lessens the fear of prolonged deflation. Fear of prolonged deflation can make consumers spend less and companies sell less.
isamaish answered the question on September 9, 2017 at 11:55

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