Question

Average inflation rates tend to be higher in countries that have relatively weak judicial systems and property rights. Why do you think this is the case? Would you expect these countries to have higher or lower national debt? Why?

Answer 1

introduction:-

As we all know as the property become public property from private people start to over utilies it or do not take care the main problem is they will utilize such resources more than it's required and it will leads to the rise in the level of inflation.

Explaination:-

in our question also we have talked about the weak judicial system and lack of property rights if people able to retain someone'to property easily because of weaker property rights it will leads to market failure they will use such property carelessly because they don't have to pay price for such free property so they make it over utilies and doesn't take care for the property​ now just think that what if it becomes universal everyone started doing this everyone can use property freely they can earn as much as they want without paying a single panny such condition will leads to inflation and the market failure people who are not able to retain property rights. Ultimately they have to bear the cost of inflation and they don't have any motivation for work further so they such things will harmfull to both physical as well as human resources.

Now our next question is how the inflation will affect to the national debt as such the inflation will leads to the increase in the Income of the people and government will able to more tax from the each individual but what if the inflation increases but the wage rate does not raise along with inflation. In this case it will become more difficult to pay off your debt. Because the income of the people remains same but they have to spend more on the goods they purchase will leads to decrease in the disposable income so the situation in which the inflation rises but wages don't will be the worst for any economy.