Economists sometimes argue that moderate inflation may help the economy by making wages in labor markets more ["", "", ""] . The discussion in the text pointed out that wages tend to be sticky in their downward movements and that unemployment can result. A little inflation could nibble away at ["", ""] wages, and thus help real wages to ["", ""] if necessary. In this way, even if a moderate or high rate of inflation may act as sand in the gears of the economy, perhaps a low rate of inflation serves as oil for the gears of the labor market. This argument is controversial. A full analysis would have to account for all the effects of inflation. It does, however, offer another reason to believe that, all things considered, very low rates of inflation may not be especially harmful.
Economists sometimes argue that moderate inflation may help the economy by making wages in labor markets more ["", "", ""] . The discussion in the text pointed out that wages tend to be sticky in their downward movements and that
Inflation is brought on by changes in the cost of production and distribution, an imbalance in the money supply and demand, or a rise in the tax rate on goods. When the economy experiences inflation an increase in the price of goods and services the value of money decreases. As a result, a given unit of money now buys less goods and services. The worst individuals involved are the consumers. Consumers find it difficult to buy even the most basic necessities due to the high price of daily goods. As a result, they are forced to demand more wages. As a response, the government works to control inflation. Redistributions of buying power brought on by inflation may benefit some while harming others. People who retain a lot of cash, whether it is in a safe deposit box or a suitcase beneath the bed, are among those who suffer from inflation. Money loses a part of its purchasing power when inflation occurs. Anyone whose financial assets are invested in a way that causes the nominal return to fall below inflation will typically experience inflation.
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