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A moderate dose of inflation is necessary for the development of an economy. Briefly explain.

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A sustained rising trend in general price level is known as inflation and if there is a sustained rise in price over time at a mild or moderate rate say round 1 to 2 percent per year it is desirable for the development of an economy because if price will increase, profit will increase, more profit will lead to higher production of goods and services, which increases national income and enhance economic develops.

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