Inflation §

Group: 5 #group-5

Relations §

• Compounding: Compounding must take into account the effects of inflation, which can erode the real value of returns over time.
• Aggregate Demand: Higher inflation can reduce the real value of income and wealth, decreasing aggregate demand.
• Economic Growth: Rapid economic growth can sometimes lead to inflationary pressures if demand outpaces supply.
• Currency Conversion: Inflation rates can impact the relative value of currencies and affect currency conversion rates.