Question: In the past few years, CPI inflation has often differed by more than 1% from its 2% target. In the winter of 2015 the UK

In the past few years, CPI inflation has often differed by more than 1% from its 2% target. In the winter of 2015 the UK experienced a brief period of deflation but, more recently, inflation has been over 3%.

Evaluate the view that inflation is always preferable to deflation.

[25 marks]

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