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Explain the concept of inflation. How it affects the lender or borrower depending on if inflation...

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Accounting

Explain the concept of inflation. How it affects thelender or borrower depending on if inflation is rising ordeclining

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Inflation can benefit either the lender or the borrower depending on the circumstances If wages increase with inflation and if the borrower already owed money before the inflation occurred the inflation benefits the borrower This is because the borrower still owes the same amount of money but now he or she has more money in his or her paycheck to pay off the debt This results in less interest for the lender if the borrower uses the extra money to pay his or her debt early Causes of Inflation When looking at the inflation rate for an entire economy most economists agree that the longterm    See Answer
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