Advertisements
Advertisements
Question
State the effect of inflation on creditors.
Advertisements
Solution
- Inflation has a negative effect on creditors. When inflation develops, the money creditors receive back from borrowers has less purchasing power than when it was first lent.
- This means that the actual worth of money declines over time, and creditors essentially lose a portion of the value of their loans as a result of rising prices, because the money repaid to them buys less goods and services than it would have before inflation.
APPEARS IN
RELATED QUESTIONS
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.
The debt which yields income to the government is called as ______.
Explain how taxes can bring about equality in income distribution.
Examine any three adverse or evil effects of inflation on production.
Observe the relationship of the first pair of words and complete the second pair.
During inflation the debtors gain.
During inflation the ______ lose.
Which of the following section of the society is most adversely affected by inflation?
Mention the effect of inflation on the value of money.
Discuss the effects of inflation on production.
How does inflation affect the following?
Farmers
