Steady inflation rates is an indicator to the federal reserve that the economy is healthy. Prices increase consistently and steadily, but never quickly. Most economies aim for this because stable inflation at a moderate rate promotes investment and consumption.
Benefits of Inflation Having more money means spending more, which increases total demand. In order to meet increasing demand, production must increase. Additionally, debtors benefit from inflation because they can return their loans with funds that are less value than the funds they borrowed. Healthy Inflation economy growth benefits from moderate inflation of about 2%. When costs are expected to increase.
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