Question

Discuss the effects of inflation on Fixed income groups

Answer 1

The effect of inflation on fixed income groups is as follows:

Fixed income groups: People who receive a fixed income are hit the hardest. People living on past savings, fixed interest or rent, pensions, salaries etc. suffer during periods of rising prices as their incomes remain fixed. The middle class who work hard to provide for their children's education, livelihood in the times of sickness and old age, and to accommodate their day-to-day expenses find it difficult to survive in the times of serious inflation.