What is the impact of high inflation on the economy?

What is the impact of high inflation on the economy?

Step 1: Understand what inflation is. Inflation means that prices of goods and services are rising.
Step 2: Recognize that high inflation means prices are rising quickly.
Step 3: Realize that when prices go up, the same amount of money buys fewer things. This is called 'eroding purchasing power.'
Step 4: Understand that when people can buy less with their money, they may save less because they need to spend more on everyday items.
Step 5: Acknowledge that high inflation creates uncertainty. People and businesses may not know how much prices will rise in the future.
Step 6: Conclude that this uncertainty can lead to less spending and investment, which can slow down the economy.

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