Economics Inflation Questions
The impact of inflation on consumer confidence can vary. In general, moderate inflation can have a positive impact on consumer confidence as it indicates a growing economy and increasing wages. This can lead to increased spending and investment, boosting consumer confidence. However, high or rapidly increasing inflation can have a negative impact on consumer confidence. It erodes purchasing power, reduces the value of savings, and creates uncertainty about future prices. This can lead to decreased spending, lower consumer confidence, and potentially slower economic growth.