[War_ooc] Activity requirement?
Dylan de Valk
dylandv at gmail.com
Sat Jul 11 19:08:06 EDT 2009
ok well regarding inflation:
the faster an economy is growing, the higher the inflation. when an economy
is struggling, there is little pressure to increase production which means
little to no inflation. If you want an economy to grow fast, lower interest
rates. but by lowing the central bank's key interest rate, you encourage
inflation as a side effect of growth.
the perfect inflation rate is around 2-3%. any higher, and prices spiral
out of control as the economy heats up too much. any lower, and you are
facing economic stagnation and deflation. the way our free market system is
setup, inflation is a natural by-product, which while controllable, cannot
be eliminated without reforms.
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