Merchant class
Consumer class
Salaried class
All of these
Answer is Wrong!
Answer is Right!
The correct answer is: D. All of these
Inflation is a general increase in prices and fall in the purchasing value of money. It can benefit the merchant class, the consumer class, and the salaried class.
- Merchant class: Merchants benefit from inflation because they can charge higher prices for their goods and services. This is because the purchasing power of money decreases during inflation, so people are willing to pay more for the same goods and services.
- Consumer class: Consumers benefit from inflation if they have assets that are not affected by inflation, such as real estate or stocks. This is because the value of these assets will increase in real terms during inflation. However, consumers who have debts, such as mortgages or car loans, will be worse off because the value of their debt will decrease in real terms.
- Salaried class: Salaried workers are typically worse off during inflation because their salaries do not usually increase as quickly as prices. This means that their purchasing power decreases. However, salaried workers who are in high-demand occupations may be able to negotiate higher salaries to keep up with inflation.
In conclusion, inflation can benefit or harm different groups of people depending on their circumstances.