Question

Is inflation likely to be a problem for at least some low- and middle-income economies in the near future?

Short answer

Yes, inflation can likely be a problem for at least some low- and middle-income economies in the near future.

Step-by-step solution

Step 1. Define inflation.

Inflation is defined as a gradual increase in the price of goods and services in a given economy.

Step 2. Is inflation likely to be a problem for low- and middle-income economies?

Inflation is defined as a gradual increase in the price of goods and services in a given economy.

Yes, low-income countries with erratic macroeconomic policies run the risk of experiencing high inflation.

In order to limit aggregate demand, the supply of products and services must be increased while money incomes must be reduced.