Question

Which section of the society gains during inflation ? Why?

Answer 1

Generally, the flexible income groups, such as businessmen, traders, merchants, speculators gain during inflation due to wind-fall profits that arise because prices rise faster than the cost of production.

Answer 2

Inflation means a state of general rise in prices. Inflation results in redistribution of income and wealth because the prices of all the factors of production do not increase in the same proportion. Generally, the flexible income groups, such as businessmen, traders, merchants, speculators gain during inflation due to wind-fall profits that arise because prices rise faster than the cost of production.