What is inflation and why would high inflation have a negative effect on the
economy?

Inflation erodes purchasing power or how much of something can be purchased with currency. Because inflation erodes the value of cash, it encourages consumers to spend and stock up on items that are slower to lose value.

for this case we have the following equation:

we apply distributive property to the terms within parentheses.

subtracting 2 on both sides of the equation: