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Why did the Full Employment and Balanced Growth Act of 1978 establish 3 percent inflation as the benchmark rather than zero i
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* Infalation is nothing but an increased demand which needs to be fulfilled in the market. If the inflation is zero that means there is no excess demand in the economy to be fulfilled the present supply will keep the consumers happy in the market.

* It will be lead to no investment as no increase in the supply is needed. it will further subdue the demand and might cause recession in the economy. A little inflation means an increase in the employment and increase in demand. So inflation is best if in a managed condition.

*Thank you*

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