Reducing inflation is a policy with temporary costs and permanent benefits.

Question

Quizplus · Accepted Answer

When a country reduces inflation through monetary or fiscal policy, it may lead to short-term costs such as decreased economic growth, job cuts, and reduced consumption. However, in the long run, reducing inflation results in stable prices, increased consumer and business confidence, improved investment climate, and sustained economic growth. Thus, reducing inflation is a policy with temporary costs and permanent benefits.

Reducing Inflation Is a Policy with Temporary Costs and Permanent