Post
Topic
Board Economics
Re: Is Inflation Necessary
by
Samlucky O
on 13/06/2024, 19:26:21 UTC
But is inflation needed?
inflation is a normal thing in all country all over the world, it doesn't only happens to some country. For me inflation has it important too in the sense that it increases work force of any country. For example when the goods becomes expensive more people will increase there production. Be it agriculture or manufacturing sector and many other sectors. It also reduce  importation and increase exportation.

Why can't we just keep the currency at the same value?
The reduction in value of currency is as a result of limited in supply in goods which cause scarcity and it causes inflation and goods becomes expensive and people say money has reduced in value. Money doesn't reduce in value rather scarcity males things more expensive than before but people misinterpret it.

And why does it only happen to money?

For example, the same wouldn't happen if we used gold as a currency instead.
I don't think so. If gold was used as money, inflation would have affected it. because if it was measured in 1gram to buy a basket of orange before, When inflation happens, 2 grams of gold would be used to purchase that same goods of 1gram of gold. Using gold as currency does not mean inflation would not affect it.

Is inflation a ploy that the government uses so people don't get rich off of savings?
Though most inflation is a natural inflation while some are manipulated by government, but in which ever way anything that has advantages also has disadvantages because most people gain from it while some lose from it. So its vise versa.