The most important economic phenomenon lying ahead of us - The most important economic phenomenon as investor in 401k plan and mutual fund is the

The most important economic phenomenon lying ahead of us -...

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The most important economic phenomenon as investor in 401k plan and mutual fund is the inflation versus deflation battle. Inflation and deflation is a phenomenon not just of money supply, but of money in circulation. (stockmarketinvesting.com) High unemployment, a weak real estate market causes deflationary events. The government can increase money supply by issuing stimulus checks as a deterrent. But people are unwilling to spend it spur the economy. They rather save or pay off debts instead. Deflation can occur because the money in circulation can drop even while the money supply is increasing. With the unprecedented expansion of the money supply, there will inevitably come a time when the velocity of money will come back and cause greatly accelerated inflation. From the e-Activity, explain the most important information you would

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