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What are the potential problems that can result if central bankers set a target of a zero rate of inflation?

User Maqsood
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Final answer:

Setting a target of zero inflation can lead to potential problems such as deflation and neglect of other economic goals.

Step-by-step explanation:

When central bankers set a target of a zero rate of inflation, there can be potential problems. One problem is that if inflation is set too low or at zero, it can lead to deflation, which is a decrease in overall prices. Deflation can be harmful to the economy because it can discourage consumer spending and investment. Additionally, if central bankers are solely focused on achieving a zero rate of inflation, they may neglect other important goals like maintaining low unemployment and promoting economic growth.

User Spbsmile
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