Archive | Effects

The following points highlight the four main effects of inflation on rising of prices. Effect # 1. Inflation and Income: As noted earlier, unemployment intensifies the scarcity problem by reducing or even ter­minating the incomes of some people. Inflation also reduces income—not in the same way as unemployment, but by reducing the pur­chasing power of money. When inflation sets in, [...]

Read this article to learn about the ten major effects of inflation and deflation on different sectors of the economy, i.e., (1) Effects on Production, (2) Effects on Distribution, (3) Debtors and Creditors, (4) The Entrepreneurs, (5) Investors, (6) Farmers, (7) Wage Earners, (8) Middle Class and Salaried Persons, (9) Government, and (10) Public Moral. 1. Effects on Production: Keynes [...]