Yes, but with a larger cake, it makes sense to have more slices.
There are other reasons that inflation is good too, having to do with sticky wages and recessions. I'm not sure how to work that into the cake analogy though.
There are other reasons that inflation is good too, having to do with sticky wages and recessions. I'm not sure how to work that into the cake analogy though.
The perceived value of each slice relies a lot in the psychology of the public.
It's the job of the central bank to make sure the slices are proportioned properly and the perceived value of each slice of cake is maintained.