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Chapter 19: Q 19. (page 472)

Is inflation likely to be a severe problem for at least some high-income economies in the near future?

Short Answer

Expert verified

No, inflation is unlikely to be a serious problem.

Step by step solution

01

Step 1. Define inflation.

Inflation is defined as a rise in the cost of goods and services in a given economy over time.

02

Step 2. Is inflation likely to be a severe problem?

Inflation is defined as a rise in the cost of goods and services in a given economy over time.

Because most high-income countries have learned to avoid high inflation, this is unlikely to be a significant issue. In order to regulate aggregate demand, inflation can be controlled by increasing the supply of goods and services while reducing money incomes.

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