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Home > Economic
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Higher inflation or higher interest rates?

 

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Economists believe that keeping inflation under 3% is a vital part of running a good economy. When consumer spending reaches levels that test the ability of meeting demand and creates a climate of higher wages, then it is common to increase interest rates to slow spending and ease inflationary pressures. The question is WHY is high inflation worse than that high interest rates that hurt the average working class mortgagee most? Some might say that an increase in rates actually benefits the wealthy business man and even the politicians, whereas high inflation could hurt the wealthy more. Why is 3% the magic number for considering inflation under control anyway and what harm would it do if it was 5% or 7%?

 


Topic Summary:
Topic raised by: wiseguy
Status: Open
Created on: 05/05/2008
Last update: 22/06/2009
Hits: 463
Total votes: 2
Views: 1
Reasons: 1
Most popular view:

Economic actions should be made for the long term interest of everyone
100% of voters support this view

Most popular vote:

Economic actions should be made for the long term interest of everyone because It is not going to benefit anyone if the economy is not strong
100% of voters support this vote

Newest comment:

Economic actions should be made for the long term interest of everyone because It is not going to benefit anyone if the economy is not strong
100% of voters support this vote
2 votes | last update 05/05/2008 02:41:18 AM

Newest vote:

Economic actions should be made for the long term interest of everyone because It is not going to benefit anyone if the economy is not strong
100% of voters support this vote
2 votes | last update 22/06/2009 08:21:20 AM


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Most Popular View
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   Economic actions should be made for the long term interest of everyone

    Submit new view    2 votes | last update 22/06/2009 8:21:20 AM 
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