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प्रश्न
What is inflation impact on debtors?
उत्तर
Debtors borrow from creditors to repay the loan with interest at some future date. Changes in the price levels affect them differently at different time periods. During inflation, when the prices rise and the real value of money goes down, debtors pay back less in real terms than what they had borrowed and thus to that extent they are gainers.
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