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प्रश्न
How does inflation affect the following?
Debtors and creditors
थोडक्यात उत्तर
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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Effects of Inflation
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संबंधित प्रश्न
Answer the following :
What are the Non - economic effects of inflation?
Answer the following question in one or two sentences.
Explain the term deficit Financing.
Identity the correct statement from the following:
Observe the relationship of the first pair of words and complete the second pair.
During inflation the debtors gain.
During inflation the ______ lose.
Purchasing power of money falls when ______.
State running inflation impact on fixed income groups.
Mention the effect of inflation on the value of money.
State the effect of inflation on creditors.
Why do producers gain in the short run during inflation?
Which section of society gains due to inflation? Why?
