Explain how inflation affects savings and investment

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Reference no: EM13868713

In economics, inflation is considered as a tax. There are also various costs of inflation.

What is the inflation tax, and how might it explain the creation of inflation by a central bank? Explain how inflation affects savings and investment.

Inflation distorts relative prices. What does this mean and why does it impose a cost on the society?

Reference no: EM13868713

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