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प्रश्न
How does inflation affect the following?
Debtors and creditors
उत्तर
- During inflation debtors gain but the creditors lose. When prices rise, the value of money (i.e., purchasing power of money) falls. Though the debtors return the same amount of money, but pay less in terms of goods and services. The purchasing power of money was high when they had borrowed but low at the time of return. Thus, inflation helps the debtors.
- On the other hand, creditors stand to lose. Although they get back the same amount of money which they lent, they get less in terms of goods and services. Thus, there is a transfer of wealth from creditors to debtors.
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संबंधित प्रश्न
Answer the following question in one or two sentences.
Explain the term deficit Financing.
The debt which yields income to the government is called as ______.
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Identity the correct statement from the following:
Observe the relationship of the first pair of words and complete the second pair.
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How does inflation affect the following?
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Which section of society gains due to inflation? Why?
Which section of the society is worst affected during inflation? Why?
