Why is inflation a bad thing?

I agree with you on this which is why i didn't suggest him to really go into it, at anything below degree level its essential you tick the correct boxes rather then demonstrate a wider understanding...saying that even at degree level that is sometimes the case.

o dear have my posts been that bad that you need to ask if i'm at university lol. Yes i'm a finalist...role on june!

not if they are rational.

Hey, this is A level i don't have to let my classical assumptions hold :fuhrer:, i have a big problem/personal vendetta with this assumption to be honest.

If you want to really impress your teacher and gain lots of evaluation marks. Do a paragraph on inflation not being bad at, say that when wages rise with inflation even though wages dont go up in real terms but in nominal terms workers still feel more wealthier and are more inclined to spend.

Uhhh, that is a lovely collection of bad economics right there. If inflation occurs consumers will spend more, as durable goods are a better store of wealth than currency, as the real value of currency is falling due to inflation.

Inflation helps those who have already borrowed as the real value of their debt is falling. The nominal interest rate may rise, but only so that the real interest rates stay the same. This means there will be no effect on business investment/consumer borrowing due to no change in real interest rates. It has been noted than moderate inflation can increase business investment, as physical capital becomes a more attractive prospect relative to currency, as currency is continuously depreciating.

Government benefits from inflation - as it is a debtor at long-term fixed interest rates. High inflation means that the real value of public debt falls.

Excuse me, but how does the high prices encourage consumers to spend more???
Also, if consumers don't spend more, then how will the government benefit??
You call my economics, you don't know what your talking about

A rising price level makes consumers spend more, as the money they have is constantly getting worth less. Therefore, they get more if they buy sooner. This reduces consumer propensity to save, ie. they spend more.

How does government benefit? Governments are usually in debt (our public debt is 43%). This is in bonds that are at fixed interest rates. When there is high inflation, the government debt's real value depreciates, and so they benefit.

except propensity to save is mostly determined by the real interest rate. as that is your return on savings.

not what inflation is like.

even if there was 20% inflation, if I was offered 50% interest i would gladly save all my money.

Sure, but the real interest rate is determined by two things: the nominal interest rate and inflation. Taking it ceteris paribus, if inflation rises, then the real interest rate falls, therefore so does propensity to save.

A rising price level makes consumers spend more, as the money they have is constantly getting worth less. Therefore, they get more if they buy sooner. This reduces consumer propensity to save, ie. they spend more.

How does government benefit? Governments are usually in debt (our public debt is 43%). This is in bonds that are at fixed interest rates. When there is high inflation, the government debt's real value depreciates, and so they benefit.