Continued inflation can affect people in different ways. Those who live on fixed incomes suffer the most because the are not able to buy as much. Those who lend money when prices are lower may be paid back in dollars of reduced purchasing power. Banks and savings and loan associations also tend to lose from inflation. Should inflation continue for a long period of ti

me, the country as a whole may begin to invest less and consume more, as people find it more profitable to borrow than to save. Therefore, it can be said that inflation tends to cause societies to use more of its resources for today's purposes and sets aside less for tomorrow's needs. This is a matter of concern for the Bank of Canada. In order to stop inflation from becoming a problem, the Bank has issued a proposal of increasing interest rates.

Economically speaking, with an anticipated increase in interest rates, there will be an increase in the amount of stocks and bonds purchased. The social trade-off is that people are not going to buy as much. This means prices will drop and inflation levels will decrease. Even with high interest rates our country can operate at full potential. It just eliminates the negative effects of inflation. It may not seem like the best idea right now, but the centr

Some common words found in the essay are:
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Approximate Word count = 608
Approximate Pages = 2 (250 words per page double spaced)