A small amount of inflation may be good for the economy since

Question

Quizplus · Accepted Answer

Small amounts of inflation allow for real wage adjustments to be made without employers having to cut nominal wages, which can be difficult to do and can lead to dissatisfaction among workers. This can lead to a more efficient labor market and increased productivity. Additionally, a small amount of inflation can help prevent deflation, which can lead to stagnant economic growth and even a recession.

A Small Amount of Inflation May Be Good for the Economy