Economy 53,188 Posted August 25, 2014 Author Share Posted August 25, 2014 Isn't that just going to increase inflation? not necessairily. U can raise interest rates as the economy strengthens to tame inflation. Inflation will still rise a bit as it tends to when the economy is stronger but wages will rise faster than inflation so its worth it. When the economy is weak like now inflation is lower but often wage increases are so low it doesnt even keep up with low inflation If wages to inflation was always the same ratio economists wouldnt track it down so much Link to post Share on other sites More sharing options...
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