What is an Overheated Economy?

An Overheated Economy is a stage where an economy has or is just about to reach its peak growth.
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An Overheated Economy is a stage where an economy has or is just about to reach its peak growth. Due to good economic conditions consumers are spending more with production unable to keep up leading consumer demand being greater than the supply causing high levels of inflation. The next stage would be for the central bank to increase interest rates to try to control the rapid rise in inflation, this will eventually lead to recession.

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