Does anyone know how does the inflation affect the economy?
1) Inflation lowers the value of the dollar, what you could buy with a dollar 50 years ago is much more than what you can buy with a dollar today. 2) A recession is when the productivity of the nation declines. If we are producing and consuming goods, jobs and wealth are lost. 3) When people aren’t able to borrow money, it makes it much harder to start and finance businesses, buy homes, cars, etc. If people cant buy things such as cars and homes, the businesses that sell cars and build and sell homes are hurt also. Credit is very important to the health of the economy.
