why deflation is more dangerous than inflation?

2010-10-19 4:48 pm
Why deflation is more dangerous than inflation?
What is wrong with "money's value" grows higher?
Thank you

回答 (3)

2010-10-19 6:02 pm
✔ 最佳答案
When we say that there is deflation in the economy it means that the prices of commodities have decreased to a great extent.When the prices if commodities decrease producers won't be willing to produce more goods(as they don't get enough profit due to low prices)which will result in people being unemployed as producers can't afford to keep many workers due to their low profits. When there is deflation in the economy the value of money is high and when the value of money is high the products/goods loose their value which will discourage the producers to produce goods which will ultimately increase unemployment(like i mentioned above)
2010-10-19 11:55 pm
Who says it is? It depends on whether you already have money or not. My response is another question. If inflation is a kind of hidden tax and the money you do have doesn't go as far, how could inflation be considered less harmful than deflation?


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