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Topic: Miscellaneous
Number of pages / Number of words: 4 / 863
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Inflation thus encourages borrowing and discourages saving. It also leads people to buy real estate and durable goods that will keep their value over time. In the United States this tendency is reinforced by the tax system, which allows taxpayers to deduct property taxes and interest payments from their taxable incomes...


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If inflation continues for a long time, the country as a whole may begin to consume more and invest less as people find it more profitable to borrow than to save. In other words inflation causes society to use more of its resources for today's purposes and to set aside less for tomorrow's needs. Causes of Inflation: Inflation has many causes, but they all operate to raise the demand for goods and services beyond the capacity of the ecomomy to satisfy that demand...


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