Inflation

Who is hurt and helped from inflation

Inflation is the rise in the general level of prices in an economy. The ones who are hurt from inflation are the people who aren't prepared for it. People who save a lot are hurt from this because with inflated prices they are not able to save as much. When you are someone who saves a lot you are not used to when you aren't able to save on a regular basis. The retirement fund is affected by this because you aren't able to put as much away as you would like. People who live on social security and different retirement plans are affected because their money is the same no matter what the price of goods are. As prices are rising they are able to buy less because their money is fixed and never increases due to a change in economy. Also, Creditors are hurt by inflation because when someone takes out a loan then that amount of money lessens on its worth due to increasing prices. As prices go up then the value of the dollar deceases.

As inflation increases prices then so do the people who benefit from it. The loan officers use this time to get people to take out more money due to rising prices. People will need more money during this time because people do not want to change their lifestyle due to increasing prices in goods. The flexible income person is not greatly affected by inflation because they are flexible with their income. Business owners can benefit from inflation because they can raise their prices faster than inflation can and thus receive greater revenue. Companies will raise their price if they think that could be an inflation in prices and be receiving more income even before an inflation occurs. Businesses very rarely are hurt by inflation due to the fact that they can raise the price of their product and never see the profit diminish from inflation. Inflation is very hard on the economy as a whole but people do survive this and even benefit