What are the long-term effects of inflation on the economy?

What are the long-term effects of inflation on the economy?

Long-term inflation can erode purchasing power, distort spending and saving habits, and lead to uncertainty in investments.

How does inflation affect interest rates?

Typically, central banks may raise interest rates to combat high inflation, which can slow down economic growth.

What impact does inflation have on wages?

Inflation can lead to wage increases, but if wages don't keep pace with inflation, real income can decline.

Are there any benefits to inflation?

Moderate inflation can encourage spending and investment, as people are more likely to buy now rather than later.

How can individuals protect themselves from inflation?

Individuals can invest in assets that typically outpace inflation, like stocks or real estate, and consider inflation-protected securities.