Most economists agree that the best rate of inflation for a stable economy would be around:
A) zero.
B) two to three percent.
C) five to six percent.
D) seven percent.

Question

Quizplus · Accepted Answer

Most economists agree that a low, steady rate of inflation between two to three percent is healthy for an economy. This allows for moderate price increases, which can stimulate economic growth, while still maintaining the overall stability of the economy. Zero percent inflation may lead to deflation, where prices decrease and consumers delay purchases, leading to economic stagnation. On the other hand, high inflation rates above five percent can lead to a decrease in purchasing power, which can discourage spending and economic growth. Therefore, two to three percent is the generally accepted best rate of inflation for a stable economy. Option C and D are both incorrect as they are too high and can lead to hyperinflation.

Most Economists Agree That the Best Rate of Inflation for a Stable