Why is inflation bad?

Answer 1

Inflation (the rate at which prices go up - or putting it in another way, the rate at which the value of your money goes down) is bad when it is higher than the rate at which people's disposable income increases.

Imagine if one day a penny can by you an apple. The next day you need two pennies to buy a similar apple but your salary stays the same at 10 pennies a day. So that first day you can buy 10 apples with your salary but on the second day you only earn enough to buy 5.

But if your salary goes up to 20 pennies on that second day, you can still buy 10 apples with your salary. If that was to happen, you don't directly feel the effects of the inflation in the cost of apples. In very simple terms, that is how inflation effects your buying power.

But economics are intertwined and never that simple.

Answer 2

The down side is that salaries do no longer continuously flow up with inflation step for step and to an identical degree. very few situations does it particularly do this. additionally, it hurts international commerce if different countries do no longer inflate to an identical degree. The greenback's procuring capability foreign places turns into weaker, and then we can't commute like we could ten years in the past, or purchase imports on an identical relative cost.

Answer 3

Inflation isn't bad, so long as it is controlled.

When it rises too high though it becomes hyper-inflation, which means that money is essentially worthless.

At that point people have to adopt a bartering system to survive, because nobody wants money because it is worthless, which means the country's economy essentially collapses.

Answer 4

Inflation= it is a word in economics means supply and demand.
-the more demand the more the prices gonna go up.
-the lesser the demand the price gonna go down.
-the rare the product and the higher the demand prices well go up.
-it means more demand than supply.
-"it is only bad when everything in economy prices goes up and it is out of control".

Answer 5

Just like a hollow inflated baloon, it is all inflated, but has no substance, and when punctured, collapses

Answer 6

Because reduces the value of your salary, respectively increase the cost of goods and add to your loan payment.

Answer 7

Because everything gets so expensive. That means that the economy is not good.

Answer 8

It blows you up?

Answer 9

no

Answer 10

NOT IF YOU ARE A BALLOON.