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which one is wrost for an economy?

2007-02-18 21:00:23 · 3 answers · asked by nunezger 1 in Social Science Economics

3 answers

Depends on the severity of the inflation. Some inflation is 'normal' in a growing economy. But there have been many instances in history where hyper-inflation have basically ruined economies and left millions in poverty.
But while inflation is usually normal, deflation is almost always negative (no pun intended). As prices decrease, real wages (which are generally 'sticky') increase in value. Since prices are generally taken from the market, firms take losses or shut down (especially if the deflation is prolonged).

Peace

2007-02-18 22:20:29 · answer #1 · answered by zingis 6 · 0 0

Deflation is worse. There is no such thing as non-inflationary growth. Deflation is an indication of very serious problems.

2007-02-18 21:08:10 · answer #2 · answered by a bush family member 7 · 1 0

Both are worse.I dont see one worse than other.

2007-02-18 21:04:31 · answer #3 · answered by Sheeth 5 · 0 0

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