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The Effects Of Inflation

Due to inflation following can be happen:-

A) Distribution of Income and Wealth

01. Fixed income based employee:
In case of fixed income peoples their income is fixed when any inflation is create they face a serious problems. They have to cut down their consumptions or expenditures.

02. Debtor and creditor:
In case of inflation creditor face a loss, because his/ her receivable money will lose its value. On the other hand the debtor can be benefited in inflation period, because he/ she has to pay the actual money that he/ she borrow from creditor.

03. Businessman:
A businessman can be gain in the inflation period, because low income people’s money is transfer to the businessman by increasing the price of their products.

04. Tax prayer:
Tax prayer also benefited by the inflation because his payment money will be lower of the actual value.

06. Savers:
Savers are also hurt by inflation. Their amounts of future saving money will loss its value in the period of inflation.

Effects of inflation saimoom

B) Production/ output effect:

In case of inflation businessman are want to make excess profit by changing excess price of their product, so they will increase the volume of production.

C) Social effect:

In the inflation period the distance between higher and lower class peoples is increased. In case of inflation the businessman or the rich peoples can make profit on the other hand the fixed income peoples are hurt by it. The rich became richer where the poor became further poorer.
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