INFLATION

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Think people who are suffering in poverty. Did you know where did they get a lot of money? When prices rise for energy, food, commodities, and other goods and services, the entire economy is affected. Rising prices, known as inflation , impact the cost of living , the cost of doing business, borrowing money, mortgages, corporate and government bond yields, and every other facet of the economy. Inflation can be both beneficial to economic recovery and, in some cases, negative. If inflation becomes too high the economy can suffer; conversely, if inflation is controlled and at reasonable levels, the economy may prosper. With controlled, lower inflation, employment increases, consumers have more money to buy goods and services, and the economy benefits and grows. However, the impact of inflation on economic recovery cannot be assessed with complete accuracy. Some background details will explain why the economic results of inflation will differ as the inflation rate varies.