how does a country control/fix inflation?
In: 14
The simplest way is by adjusting interest rates. Interest rates are the amount of extra money someone pays someone else when they borrow money and pay them back. They give them back a little more as an extra “thank you” for lending them the money.
When everyone has to pay extra on all their loans, there’s less money going around, so sellers have to drop prices in order to sell things.
A government can also increase taxes and give out less money.
There are many methods, and sometimes they are not always good ideas.
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