Explain How The Following May Lead To Low Inflation: Low Home Demand And A Small Increase In The Cost Of Labour?


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ghazal gi Profile
ghazal gi answered
It is a very good and tricky question, I thought about this question for so much time.
The inflation can be move downward through Low home demands. This work can be accomplish when people should made low home, means people should have to make homes on small geographical area. Construction of home should not be done at very large area. When homes will be made in small area then it will lead to low inflation. Otherwise if construction will be done at large area then inflation will be high, because when people will made luxuries and big homes then for that purpose they will spend more money, which will lead to inflation.

About the low inflation in the case of "small increase in the cost of labor" is also correct. Salary of worker or day cost of a labor should be increase gradually and in small amount so inflation will be less, if the salary of worker or labor cost will be increase in high amount then automatically inflation will be increase, because individual person will have more money and because of this, money demand will increase and government will have to print more money. So as a result inflation will increase.

On the whole result is that there should not be extra money in the country, every thing should be in control, and also government should not have to print extra money, so inflation can be control.

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