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Discuss the idea that if the economyis to prosper in the long run, the control of inflation should be the mainobjective of Government
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Discuss the idea that if the economy is to prosper in the long run, the control of inflation should be the main objective of Government. Since Edward Heath spoke about inflation in 1973 it has been a generally held view that the conquest of inflation is the most important task for government economic policy. Whilst this view is beginning to be challenged in all political parties, the public universally regard inflation as having a detrimental affect on the economy. The problems caused by inflation can depend on whether the inflation is anticipated or not. If everybody knows that inflation is going to be 10% this year, and it is, then firms and consumers can plan for this. Although such planning does not eliminate the costs of inflation completely, it does mean that the rates may be more moderate. The result of a higher rate if inflation, which is fully anticipated, is to...
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