Luis's+Inflation



What inflation is: Inflation is a sustained increase in the general level of prices

The Importance of Low Inflation: It can be argued that achieving low inflation is one of the most important goals a country aims for in it's economy. This is because when a country fails to achieve low inflation there is always a negative impact on the countries living standards.

Why high inflation is bad for Australian living standards: It is generally recognised by all global citizens that high inflation will lead to negative consequences for their economies, resulting in a reduction in the rates of economic growth, less than full employment, declining incomes and a deterioration in material living standards. Inflation also reflects an erosion in the purchasing power of money, a decrease in the real value of money and other monetary items over time. E.g. a postage stamp in the 1950s cost 3 cents; today's cost is 41