If inflation lowers demand, would that not eventually offset inflation naturally without government intervention?

Question

If inflation lowers demand, would that not eventually offset inflation naturally without government intervention?

In: 42

Answer 1

Some demands are more “elastic” than others.

Vacation homes? Highly elastic demand that swells in good economic times and shrivels in downturns.

Food? Highly inelastic demand. You won’t last long without that.

This makes the impact of inflation highly variable depending on what industry you’re in and how much money you make. Kraft and Ferrari don’t sit on the same demand curves.