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Question: How might issuing money to more people result in inflation? How might inflation, in turn, result in personal hardship and/or economic instability? If a nation is forced to choose between an economic policy that results in high levels of inflation, unemployment, or social inequality, which of these would be most dysfunctional and/or harmful for society? Why? Which of these would be least dysfunctional? Why? Awnser: By issuing money to more people it will cause inflation drastically. Without assumption, we know majority people will spend the money rather than save the money, also the more money a person has the more leisure it will add onto that person’s life. Prices in goods will increase and the amount of money that people will spend will also increase accordingly. Thus causing inflation; the cost and spend eventually equals out. Inflation, in return will cause businesses and companies to lay off workers because they are losing profit from buyers. Personal hardships will result in families spending less then what they used to spend, and this will make it harder for families whom have children who attend school, buying food, and family goods. If a nation if forced to choose between and economic instability, I think unemployment will be the most harmful for society. Unemployment not only cause people to lose their jobs, but also causes them to not have any money. Companies would lose business and the nation would fall under debt a lot faster. The least dysfunctional is if a nation fell under inflation, people will still have money, but maybe not as much, causing them to be able to still live a stable enough life, moreover jobs are still available to people.

Asked By: Hot S - 10/31/2008
Best Answer - Chosen by Asker
generally speaking you are correct. . but i think that over the period of time people have been able to bear inequality better than inflation and unemployment... More
Answered By: farrukh_phd - 11/1/2008
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