EFFECTS ON INCOME: Those on fixed income (widows and pensioners) suffer it badly, but the businessmen tend to gain from it.
EFFECTS ON BORROWERS AND LENDERS – Debtors gain because the value of money they refund is less than what they borrowed.
EFFECTS ON FOREIGN TRADE – This results to imbalance of trade because the tendency to import goods to meet the needs will increase import at the expense of export.
EFFECTS ON PRODUCTION/EMPLOYMENT – Investors and businessmen make high profits as a result of the high prices of their goods. Also, the initial rise in prices of their goods is not followed by increase in the labour (wages) of the employees. In the case, workers are exploited.
EFFECTS ON THE PATTERN OF SAVINGS – In this case, creditors lose because they are paid less to the value of what they lent out.