1.
Inflation leads
to unequal distribution of wealth and income in the society. So rich
becomes richer and poor becomes poorer.
2.
Entrepreneur earns more
profit. It is because prices rose faster than the cost of production.
3.
However, fixed income
earners like pensioners, workers, salaried persons etc. are adversely affected
by inflation because their money income remains the same while the value of
money falls.
4.
People, who
invested their
money in equity shares, are the gainers because of rising prices. However those
who invest in fixed income earning assets like bonds and deposits are losers
because their money income remains the same.
5.
Generally debtors are the gainers because they repay
less purchasing power than before, when they return the debt.
6.
On the other hand creditors lose, as they receive
less in terms or real income. (purchasing power)
7. During
inflation, big farmers are gainers because prices of agricultural goods rise.
However small farmers do not gain much as the major portion of their produce is
kept for self-consumption.
